Martin Kadzere Senior Business Reporter
JINGAN Corporation, a joint venture between Chinese and local investors, has commenced coal mining in Hwange after investing nearly US$12 million, an official has said.
Chilota Collieries started operations about two months ago and is producing 30 000 tonnes of coking coal per month used to produce coke — the high quality fuel needed by smelters.
It has also deployed some of its equipment to Hwange Colliery Company, the country’s oldest coal mine where it is producing thermal coal under a mining contract.
“At our site, we are doing 30 000 tonnes of coking coal and about 30 000 tonnes of thermal coal for ZPC (Zimbabwe Power Company), which we are producing at Chaba Mines under a contract mining arrangement with Hwange Colliery,” Chilota director Mr David Zhou told The Herald Finance & Business in an interview yesterday.
The opening of the mine comes at a time ZPC is boosting production at Hwange Power Station to add 600 megawatts onto the grid.
This will nearly double coal intake.
The US$1,3 billion project, being implemented by Sino Hydro of China, is expected to initially deliver 300 MW in October next year and additional 300MW in January 2022.
ZESA Holdings, the parent company of ZPC has already raised concerns over potential shortages of thermal coal when its new units come on line. The power utility, the major provider of electricity is already lobbying the Government to be re-allocated coal concessions in Hwange lost around 2010 with a view of investing in own mines.
Reports say ZPC is also courting some Chinese investors willing to partner the power company in this project.
Coal remains a dominant energy mineral for Zimbabwe. The country boasts of vast reserves of coal particularly in the north-west and southern parts of the country.
Presently, three companies—Hwange Colliery Company, the country’s oldest coal mine, Makomo Resources, Zambezi Gas and recently Chilota, are operating in the Hwange district.
Zimbabwe is also likely to see a surge in coking coal demand in light of lined up investments in the ferrochrome industry. These include new smelters, which Zimasco, the country’s largest ferrochrome company and Afrochine, intends to build in Shurugwi. Zimasco also intends to add another smelter at its Kwekwe complex, while Zimbabwe Alloys is revamping production after securing a new investor. However, some of the projects are likely to be delayed due to coronavirus.
The new investments in the coal industry are set to boost the country’s prospects of meeting mining revenue targets under the US$12 billion mining roadmap launched by the Government last year, of which the coal sector is expected to contribute US$1 billion.
Recently the Government granted 28 special grants to prospective coal miners, but very few are being utilised.
The Government has repeatedly warned that it will repossess unproductive mining claims to pave way for new players.
Many businesspeople with influence hold most of the mining claims for speculative reasons, while serious investors are made to wait.
Zimbabwean Government believe mining and agriculture will provide quick start to turn around the economy.