Fairness Moyana
Zambezi Gas and Coal Mine has set its sights on various expansion initiatives that will include venturing into underground mining, establishing a coking plant, gas exploration and construction of a Thermal Power Station between 2022 and 2024.
The company has since ramped up its coal production from 100 000t per month to 200 000t in support of government’s vision towards establishing a US$12 billion mining industry by 2023 in which the coal sector is expected to contribute US$1 billion.
The company director, Mr Linos Masimura said the coal miner which had been expanding from inception was raring to go the opening of the southern pit leading to increased production.
“We are actually in the process of expansion as we started that from 2020 were we demarcated a place for underground mining. Our operation is going to ran parallel where we on one side we have underground activities and the other opencast mining. As it is now in terms of value addition we have set our sights on establishing our own coking plant,” said Masimura.
He however, said opencast mining would continue to run concurrently with the establishment of an underground shaft.
“Plans are at an advanced stage to start underground mining while opencast activities will continue. We are going to open up an underground at one of the pits we are currently mining out in order to reach the coal that is buried far beneath.”
The indigenously owned Zimbabwean company said it was growing its export market which currently stood at 30 percent. However, it bemoaned the forex retention level which it argued was unsustainable.
“We are exporting, we have grown our exports to about 30 percent but the challenge we are facing is two fold. Firstly we have to satisfy the local market because we cannot export everything there’s need to sustain our industry. Hence it’s important that the pricing is correct. The second issue is that when we export we only get 60 percent while the rest is automatic retention. We are facing competition and we want to increase the prices but we learnt that a Botswana firm is likely to reduce the prices because it’s not facing the same challenges as we are,” said Masimura.
He suggested that coal miners be allowed to retain 90 percent of the foreign currency earned arguing that it keeps them afloat to continue supplying local industry where its paid in Zimbabwean dollar.
Masimura said they were also looking at constructing their own coke oven battery as part of value addition. The company is one of the major suppliers of coking coal local Chinese coking companies.
“In terms of value addition we are looking at going into coke production ourselves in addition to supplying the existing coke batteries with which we have good relationships with.”
Construction of the 320MW Thermal Power Station was stalled following the a climate change induced policy shift on funding coal projects.
“We slowed down after the announcement that coal projects are going to be put on the can in terms of funding especially from China. We had to revise our business plan as well as our engagements with several potential funders and EPC contractors because most of the ones engaged previously could no longer fund from a legislative point of view.”
However, the company said it would look to local sources for funding for the project as it sought to court potential investors.
“What we have decided to do is we are approaching it from two angles. The first being internal funding, from shareholders and banks and secondly external. Internal funding will link along just like what we have done with the mine on our own and build as much as we can whilst court external investors to join. We do have those that have expressed interest but we are still at courtship stage. From our side we decided to go ahead and start construction of our offices which is full time in place.”
The company appealed with minister of Mines and Mining Development, Winston Chitando during a recent tour of the mine for access to sufficient foreign currency arguing that forex shortages were threatening efficient production.
“The foreign currency which we are getting from the auction system that we have been participating in is not enough. Last year we applied US$1 million in two batches but we only got US$105 000 but we are yet to access it. We only have that option to resort to because we use 100 percent forex on diesel, explosives, spares and machinery,” said the operations manager, Engineer Menard Makota.
Chitando assured management that he would engage his counterparts while emphasing government’ s commitment to creating viability in the sector.
“We would want to see the Coal Producers Association being more active as we engage with government and RBZ to make sure that we find ways on how coal producers can be assisted to have sustainability of production. The coal industry is very important to the development of the country. We want to see the coal and power projects coming on stream. The value addition in terms of the coke oven ls and steel projects can only be sustained if there is sufficient supply of coal so its critical and we want to look at it holistically,” he said.
He said while the traditional funders of coal projects had withdrawn their money he was impressed to learn that proactive companies had devised alternatives.
“What has happened is that there has been a slow down in zone of the power projects which were supposed to take off last year because of the policy especially those who were getting funding from China. While the funders from China are no longer funding coal projects I’m also glad that most of the players have come up with a plan B which will see these projects taking off this year.”
The company supplies the coke ovens, food industry, tobacco farmers, brick making companies and ZESA among others industrial players.
