By Derick Tsimba

Zimbabwe Power Company (ZPC) has flighted a tender soliciting for the expression of interest from consultants on the pricing model for the supply of coal, Harare Post has learnt.

The roping in of consultants on the coal pricing study to be finalised by September 2019 has been a result of continuous misunderstanding between ZPC and the coal suppliers, namely Hwange Colliery Company Limited, Makomo Resources and  Zambezi Gas and Coal Mine over the actual pricing of thermal coal.

When the study is complete, an appropriate coal pricing model that self-adjusts to market conditions and variables that underlay coal production is expected to be established.

The appropriate coal pricing model should assist the current situation where coal suppliers are price takers as their prices continue to be predetermined by ZPC. Due to escalating production costs in the recent months, prices being offered to coal suppliers by ZPC are now below their production costs forcing them to operate at a loss.

Coal suppliers are now resorting to withholding coal supplies to ZPC which in turn is reducing thermal power generation. Recently Munyati and Bulawayo Power Station have been forced to shut down because of the unavailability of thermal coal to fire the Power Stations.

ZPC is offering close to RTGS $360 per tonne for coal whilst suppliers are demanding close to RTGS $440, Harare Post has learnt.