HomeBusiness DigestUS$100m needed for Zesa's coal project

US$100m needed for Zesa’s coal project

Roadwin Chirara/Chris Goko

AT least US$100 million is needed to develop Zesa Holdings’s planned coal mining project in western Zimbabwe, officials said this week.

erdana, Arial, Helvetica, sans-serif”>Investment in the Sinamatela and Western Coalfields in Hwange district would provide five million tonnes of steam coal per annum to power generators at the expanded Hwange Power Station (HPS).

Zesa, owning the start-stop 920-megawatt HPS, entered joint venture agreements with China National Aero Technology Import Export Corporation (Catic) earlier this year for energy and capacity expansions of a further 600 MW.

The new investors, injecting nearly US$40 million and to be repaid through tobacco exports, conditionally undertook to finance HPS’s expansion and hence the need to take up investments in mining, Zesa corporate affairs manager Obert Nyatanga said.

Since the new plant would have a life span of 50 years, the investors also wanted a secure supply of coal for optimum use of the plant. With traditional supplier Hwange Colliery Company failing to meet supply, consumers like HPS have also suffered immense disruptions to their operations.

“The prospective investors… want to be guaranteed of coal supplies to the expanded power station hence our request to government for the two coalfields located in Hwange area,” Nyatanga told businessdigest.

“The estimated investment in coal mining is about US$100 million. The project will start as soon as government finalises the processes under hand,” he said.

The processes Nyatanga was referring to relate to geological and feasibility studies of the envisaged investment.

He said that the project development master plan is already being developed.

Nyatanga said they expected the Sinamatela and Western reserves to run for at least half a century.

“The reserves have to last a minimum 50 years, which is the expected life span of a new power station, the combined power stations would require about five million tonnes of steam coal per annum,” he explained.

The engagement of Chinese investors comes after Zesa has been battling to raise foreign currency to rehabilitate and carry out new investments at its power generating plants as well as meet imports.

With generating capacity at internal plants such as HPS and northern Kariba continually failing, Zesa relies more on the goodwill of Southern Africa Development Community utilities where it draws 35% of the country’s power needs.

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