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Martin Kadzere Senior Business Reporter
ZAMBEZI Gas has commenced full scale coal production in Hwange with the company already exploring export markets in light of subdued local demand, an official said.The company’s 19 000 hectare concession is estimated to have 200 million tonnes of coal reserves.The project had been on the cards for years, but failed to take off due to funding challenges.“We recently started operations and we have done well in penetrating the local market,” director Mr Edward Raradza said in an interview yesterday.
We are pushing some reasonable volumes to power stations and local private companies. But we are also looking at export markets and our team is in Zambia to explore the market.”Zambezi Gas partners, CoalZim are doing local marketing while Zambezi Gas is focusing on export markets.Subdued performance by local manufacturers has seen demand for coal declining, prompting miners to pursue export markets to boost revenues.
While there is growing demand for coal in Asia, particularly China, the quality of coal in Hwange in terms of sulphur and phosphorous content is not suitable for such markets.Zambia has been one of the major export markets for local coal miners such as Hwange Colliery Company Limited and Makomo Resources. On the domestic market, the Zimbabwe Power Company, a subsidiary of Zesa Holdings, is the major consumer of coal.
Mr Raradza said his company was also looking at pushing some volumes to tobacco farmers.Coal is used to cure tobacco, but of late, farmers had resorted to firewood as prices for coal had become so prohibitive as a result of high costs largely related to logistics.
While Mr Raradza could not provide the current production figures, our sister paper, The Sunday News reported early this year Zambezi Gas had acquired mining equipment worth $15 million with potential of producing 50 000 tonnes of the coal per month.Coal has been the dominant energy mineral for Zimbabwe.
The country boasts of vast reserves of coal particularly in the north-west and southern parts of the country.While the Government issued mining concessions to indigenous people in the past few years, the majority of the concessions are lying idle.The Government once indicated that it would repossess unproductive mining claims to pave way for new players with capacity of developing them.
However, industry players said most of the claims have remained unexploited due to financial constraints to undertake exploitation.It is also expected that some claim holders are keeping the claims for speculative purposes.
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