Richard Shumba
More than 1,000 workers have been retrenched in Gweru after four Chinese smelting companies temporarily closed their operations due to various operational challenges.
While Chinese companies remain the largest source of foreign direct investment in Zimbabwe, many projects registered in 2025 are facing difficulties, particularly due to the recent increase in electricity tariffs imposed by the Zimbabwe Electricity Transmission and Distribution Company (ZETDC).
The Sun News Crew visited Jin An, Wel Mining, Almed, and Nelson Holding, which had previously employed thousands of locals. However, upon arrival, they found the gates closed and no workers in sight.
Company officials indicated that the primary reason for the closures was the rise in tariffs from ZESA Holdings, which increased from 7.8 cents to approximately 12.21 cents—levels deemed too high for operating furnaces.
This significant increase has made production costs unsustainable, compelling the companies to shut down their furnaces while negotiations with the power company are ongoing.
Jin An’s Finance Manager, Mr. Munyaradzi Matanyaire, stated that the current electricity tariffs are unbearable for their energy-intensive ferrochrome production industry.
He emphasized that electricity is essential for their operations, particularly for furnaces that consume substantial amounts of power. As a result, the company is requesting a review of the tariffs.
“Anything above eight cents is not viable for our operations. The increase to 12.21 cents has drastically affected us. We had no choice but to shut down some furnaces and reduce operations,” Matanyaire explained.
He revealed that, at full capacity, the company could produce approximately 5,000 tonnes per month.
However, due to power challenges, output has been reduced to just 1,000 tonnes per month, which is only 20 percent of their normal production.
“This is not just Jin An’s problem; this challenge is affecting the entire industrial sector. When production declines, employment is also impacted, and unfortunately, workers bear the brunt,” Matanyaire added.
Confirming the retrenchments, Jin An’s Human Resources Manager, Mr. Brighton Mupariwa, stated that the company has already laid off a significant number of employees as a cost-cutting measure to keep the company afloat.
“We have retrenched a total of 125 permanent employees and close to 175 contractors so far. The most recent batch of retrenchments took place in January, with roughly 26 workers being let go,” said Mupariwa.
He noted that the company had exhausted all other options before resorting to layoffs, adding that management remains hopeful that a reduction in electricity tariffs could allow them to resume full operations and rehire workers.
These retrenchments come at a time when Gweru is already grappling with high unemployment levels, raising concerns about the broader socio-economic impact of rising operational costs on the city’s industrial base.
Another smelting company, Wel Mining, which invested US$7 million to construct two 6,300 KVA High Carbon Ferrochrome Furnaces, has also ceased operations due to high electricity tariffs.
The company is part of the Zimbabwe government’s “Look East” policy to strengthen ties with China and began smelting operations on October 15, 2007.
It has provided much-needed jobs for locals and generated millions in foreign currency for the country.
Wel Mining’s core business involves smelting raw chrome ore and exporting the final product, High Carbon Ferrochrome (HCFC), to the international market, contributing approximately US$1,960,000.00 per month in foreign currency.
The company completed the construction of two 6,300 KVA High Carbon Ferrochrome Furnaces in 2019, aiming to increase smelting capacity from 3,600 KVA to 16,200 KVA, which would significantly boost production and employment.
Wel Mining’s Managing Director stated that the proposed tariff increase poses a severe challenge to the company’s operations. “We are hopeful that an amicable solution will be found, as discussions on the issue are still ongoing,” Zhen said.
Another anonymous official from a ferrochrome association reiterated that while ferrochrome production is an extremely energy-intensive industry, some companies have not shut down their furnaces.
“We are still in discussions with the government. Electricity costs are very high for ferrochrome production, but negotiations are ongoing, and no closure is planned. We hope to reach a sustainable tariff that allows operations to continue,” said the official.
While some companies are still operating, others have been forced to halt production due to rising electricity costs. “Unfortunately, the majority of other companies—averaging around 16—have already shut down their furnaces due to these high costs,” said the official.
