Zimbabwe urges big mines to cut power use by 25 pct to ease shortages

HARARE (Reuters) - Zimbabwe will ask large mining companies, including units of the world's top two platinum producers, to cut power consumption by up to 25 percent, part of measures to ease crippling shortages, the energy minister said. The Southern African country, where six in 10 people have no access to electricity, is experiencing some of its worst power cuts, some lasting up to 24 hours, worsened by the routine maintenance at its two largest power plants. Electricity shortages have been blamed for keeping away potential investors in an economy struggling to emerge from a steep recession between 1999-2008 that saw hyperinflation reach 500 billion percent and widespread food shortages. In a speech published by the official parliament journal on Wednesday, Samuel Undenge told lawmakers that the Zimbabwean units of Anglo American Platinum, and Impala Platinum Holdings and China's Sinosteel Corporation Ltd, the biggest ferrochrome producer, would have to cut power use. "It would be up to these large power users to decide on which areas of their operations to load-shed. This is expected to yield 25 megawatts," Undenge said. Mining companies in Zimbabwe are already struggling with low commodity prices as well as demands by President Robert Mugabe's government to sell majority stakes to locals under a black economic empowerment programme. The mining sector contributes more than half of Zimbabwe's export earnings. The Chamber of Mines of Zimbabwe, which represents large mines, said mining companies had been previously guaranteed by the state electricity firm that they would not face power cuts. "We are still doing the figures on the impact of this but we won't be surprised that output may even fall by 25 percent or more," Isaac Kwesu, chief executive at the chamber told Reuters. Undenge said electricity supply to residential areas and non critical areas for the military and police would also be cut. All these measures would reduce electricity power cuts in the capital Harare to 6 hours from 18 hours a day, Undenge said. Last week, Undenge said Zimbabwe will from next year ban the use of electric water geysers and give users five years to migrate to solar-powered water heaters to save up to 400 megawatts of electricity.