4 January 2013

Zimbabwe: Chisumbanje Ethanol Set for Mandatory Blending

Photo: Vanguard
file photo: Oil Installation

THE Chisumbanje Ethanol Project is set to resume production on Monday after the adoption of recommendations of the inter-ministerial committee chaired by Deputy Prime Minister Arthur Mutambara.

After a series of visits and meetings, the cabinet committee finally agreed on an adoption of mandatory blending starting with 5% and gradually moving to 10% and 20%, paving way for the resumption of operations at the massive project.

Sources said stocks of ethanol have been moved from Feruka in Mutare to Msasa in Harare in preparation for mandatory blending.

The inter-ministerial committee recommended that only E5 be mandatory while that of E10, E20, E85 and E100 blends continue as optional products on the market for vehicles compatible with them.

The committee stated that logistics and infrastructure for all blending levels must be developed quickly and should be done from Msasa and at oil companies' outlets until alternative sites are in place; in particular modifications at Feruka.

Sources said all the necessary infrastructure and logistics were in place for operations to resume at Chisumbanje after production stopped in February when Green Fuel failed to get government support for the 10% mandatory blending.

The company pinned its hopes on mandatory blending to help sell 10 million litres of ethanol it had produced.

Repeated efforts to get a comment from Green Fuel spokesperson Lilian Muungani were fruitless as she had not responded to questions sent to her yesterday.

Energy minister Elton Mangoma vehemently resisted Green Fuel's proposal for mandatory E10 saying there was no justification in enacting a law to benefit one private company.

The Chisumbanje project is a joint venture between private companies Macdom Investments, Rating and the state-run Arda. It employs about 4 500 workers who were being paid just 55% of their salaries since operations stopped last year.

Green Fuel suspended production at Chisumbanje after finding itself stuck with ethanol due to a low market uptake. The problem was further compounded by the lack of additional storage for a third product in the form of E10 by most fuel retail outlets.

Green Fuel believes the introduction of mandatory blending of ethanol and petrol would make the project viable and help Zimbabwe cut its massive fuel import bill. There are also concerns that the company is still to compensate villagers who were displaced to make way for the project. Over 287 villagers were forced to relocate to Mozambique.

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