adminBusiness Reporter
ZIMBABWE may be overtaken by Mozambique as Southern Africa’s second largest coal producer, but coal mining firms in the region continue operating at sub-optimal levels due to power shortages, a report by a consultancy firm, Frost and Sullivan said. South Africa is the region’s largest coal producer followed by Zimbabwe and Botswana. The countries produce thermal and metallurgical coal for electricity generation and for steel and brick manufacturing in domestic economies as well as export markets. Frost and Sullivan
Mining analyst Mr Wonder Nyanjowa says coal production in the region is expected to reach 308 million tonnes in the next five years.
According to media reports, the Mozambique government recently awarded four coal concessions with a total value of US$5 billion. The first of these would start operations next year, reports say, and they should create more than 1 000 permanent jobs.
These are Revobóe mine, with an estimated investment of US$746 million and a total production of seven million tonnes of coal a year; the Zambeze project, with an estimated investment of US$3,3 million, predicted to produce a total of 258 million tonnes; the Midwest mine, with an estimated initial investment of US$758 million, predicted to produce 7,2 million tonnes; and the Ncondezi project, with an initial investment of US$288-million, which will also produce about 7,2 million tones.
On the other hand, Brazilian mining giant Vale and Rio Tinto have commenced metallurgical coal mining operations in Mozambique with the bulk of the production being earmarked for the steel manufacturing industries in China and India.
“As the market grows, South Africa is poised to consolidate its lead as the largest coal producer in Southern Africa despite the depletion of the country’s Witbank, Ermelo and Highveld coal mines. Mozambique is likely to overtake Zimbabwe as the region’s second largest coal producer.
‘‘Large-scale coal development projects, coupled with the upgrading of ports and railway infrastructure, will sharply increase the country’s coal production,” said Mr Nyanjowa. Zimbabwe’s coal production in the first seven months of this year increased by 40 percent to 1,2 million tonnes due to massive re-capitalisation by coal mining firms, the report said.
A latest geological survey says Zimbabwe boasts of more than 502 million tonnes in coal reserves, which accounts for at least 10 percent of the global total coal deposits.
The Frost and Sullivan report said the rising global and regional demand for energy, along with escalating coal prices and abundant coal reserves, would spur the implementation of coal expansion projects in Southern Africa.
The report states that mining companies in the top coal producing countries are currently operating at low production levels due to the unavailability of power.
“Electricity supply in Southern Africa is expected to remain constrained due to the lack of investments in electricity generation infrastructure, project delays and long lead periods between the construction and commissioning of new power plants.
Partnering with the government to set up electricity infrastructure will ensure that coal mines remain competitive within the region’s mining industry,” Mr Manjowa said.
Coal accounts for a significant share of Southern Africa’s primary energy needs.
Online Reporter