RIO Tinto Zimbabwe Ltd (Rio) has leased out Sengwa Mine to Beta Holdings (Pvt) Ltd, which is now supplying the local market with the product for heating purposes.
>Sengwa Mine has been lying idle for some years largely because government’s electricity project failed to take off.
Although Beta Coal, a subsidiary of Beta Holdings, has won the tender from Rio it will not be able to fill the void left by Wankie Colliery Company Ltd (Wankie) to supply the local market, whose operations have been severely strained over the past three years because of lack of capacity.
The coal shortages, which have affected the local market, have largely been caused by the continuous breakdown of earthmoving machinery at Wankie.
The continued breakdown of machinery and the shortage of foreign currency to repair parts have resulted in some companies importing coal from either South African or Zambian firms.
The coal shortages have impacted negatively on the curing of tobacco, Zimbabwe’s largest foreign currency earner.
A Beta spokesperson this week confirmed that they were now leasing Sengwa Mine but said they would be able to fill the gap left by Wankie because they do not have the capacity to do so.
The spokesperson refused to shed light on how much the contract was valid citing confidentiality, but experts within the sector said the contract runs into “several millions of dollars” on a monthly basis.
Although experts said the monthly lease could vary on the tonnage of coal mined, the spokesperson refused to shed any light on the issue and referred all enquries to Rio.
Some of Beta’s subsidiaries, which are wholly owned by a group of indigenous businessman, include Beta bricks, Beta tiles and Beta furniture.
Government had targeted Sengwa Mine dually owned by Rio, to produce thermal electricity. The project became known as the Gokwe North Power Project.
The Gokwe North Power Project initially involved three partners, namely government, Rio and the Zimbabwe Electricity Supply Authority.
The project eventually collapsed when government failed to raise funds for it.
Rio’s group human resources manager Aaron Mudhuwiwa confirmed that they had leased out Sengwa Mine.
He, however, could not shed any light on the value of the agreement and for how long the contract with Beta was valid.