TWO coal mining companies are set to commence production next year in Hwange, in a development likely to boost guaranteed coal supplies to Hwange thermal power plant.
Coal intake at the power station will significantly increase when Zimbabwe Power Company, an electricity-generating subsidiary of Zesa Holdings commissions additional two units by end of 2021.
The two units are expected to produce 600MW.
The US$1 billion project, being implemented by Sino Hydro of China is 25 percent complete.
Coal remains the dominant energy mineral for Zimbabwe and the country boasts of vast reserves of coal particularly in the north-west and southern parts of the country.
The new investments will also boost the country’s prospects of meeting mining revenue targets under the US$12 billion mining roadmap recently launched by President Mnangagwa, of which the coal sector is expected to contribute US$1 billion.
Presently, three companies — Hwange Colliery Company, the country’s oldest coal mine, Makomo Resources and Zambezi Gas — are operating in the Hwange district.
The companies supply 90 per cent of coal requirements to Hwange thermal plant. New players are however expected to start production soon.
Chilota Colliery is expected to start production in the first quarter of next year while Western Coal has just completed exploration and is now seeking relevant approvals. It intends to start full scale production during the second half of the year.
Chilota director Mr David Zou told The Herald Finance & Business yesterday that his company was looking at an initial investment of US$12 million, beginning with a monthly production of 50 000 tonnes and gradually ramp it up to 100 000 tonnes by year-end.
On average, the existing coal miners are producing about 220 000 tonnes per month.
“We will be doing open cast mining and right now, the equipment is arriving,” said Mr Zou.
Western Coal mine manager Mr Jacques Viljoren said the company was looking at an investment of between US$20 and $30 million, initially starting as an open cast mine for the first six years before going underground.
“We have finished exploration and we are now moving to bulk sampling for analysis,” said Mr Viljoren.
Western Coal’s special grant is owned by businessman Billy Rautenbach. Both companies say the largest portion of their production will be delivered to the power plant.
Coal Producers Association chairman Mr Ray Mutokonyi said the coming on of Western Coal and Chilota Colliery was critical for sustainable generation of thermal power.
Recently, ZPC claimed inadequate supplies of coal by the miners was threatening the country’s power generation and wanted to produce its own coal for guaranteed supplies.
With the coming in of stage 7 and 8, ZPC said it was concerned that the existing miners might fail to adequately provide feedstock for the expanded power station.
Apart from Hwange, ZPC also operates three small power plants in Harare, Munyati and Bulawayo.
In the past few years, the Government granted 28 special grants to prospective coal miners, but only three are being utilised.
Government has persistently indicated that it will repossess unproductive mining claims to pave way for new players.