Mwana Africa calls for power price cut for Zimbabwe gold mine

HARARE, Feb 7 (Reuters) - Mwana Africa (LSE: MWA.L - news) 's gold mine in Zimbabwe, Freda Rebecca, has asked the government to cut its electricity tariff by up to 28 percent because it says current rates are punitive, a company official said on Saturday.

Toendepi Muganyi, the general manager of Freda Rebecca, said power charges of 14 cents per kilowatt-hour levied on gold mines were too high.

"Currently the 14 cents is punitive for the gold mining industry," Muganyi told Reuters during a visit to the mine in the town of Bindura, 88 kilometres north of the capital Harare.

"We have aired our grievance ... and request that there be a review to close to 10 cents per kilowatt-hour," Muganyi said, adding that electricity accounts for 14 percent of total gold production cost.

Freda Rebecca is the single largest gold mine in Zimbabwe and plans to increase gold output to about 70,000 ounces this year from 60,000 ounces previously, Muganyi said.

Mwana Africa also owns the Trojan nickel mine through locally listed Bindura Nickel Corporation (BNC) in Bindura and is raising money to modify and upgrade a smelter at the mine.

BNC managing director Batirai Manhando said once the funds are available, the project would be finished within 12 months.

On completion of the smelter upgrade, BNC, which has an off-take agreement with Glencore (Xetra: A1JAGV - news) , would be able to export nickel alloy, compared to nickel concentrates currently.

The smelter and the mine shut in 2008, at the height of Zimbabwe's economic crisis, due to low nickel prices.

The mine restarted production in Feb. 2013 and is producing 7,000 tonnes of nickel concentrate, however the smelter is still out of production. (Reporting by MacDonald Dzirutwe; Editing by Alexander Smith)