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Zimbabwe coal industry seen hinging on power plants


JOHANNESBURG – The future of Zimbabwe’s coal mining industry depends on the government’s commitment to construction of more power stations to create demand for low grades of coal, an industry executive said on Friday.

“As far as I am concerned, power stations are a pre-requisite for any future mining in Zimbabwe,” Bob Henson, managing director of CoalZim told a Zimbabwe coal conference.

The country is currently wasting tonnes of low-grade coal by backfilling it into mining pits because there are no takers.

Henson said Zimbabwe’s industries have yet to recover from near collapse during its years of hyperinflation, and demand for coal has yet to recover.

Coal production at 2.5 million tonnes in 2011 is half the more than 5.5 million tonnes produced at the industry’s peak in 1991, and there is very little chance of production returning despite coal mining being deregulated.

“I don’t think there is big potential for further mine development. Where there is potential, the capital will not come in until there is a promise of a market,” Henson said.

Zimbabwe’s economy is showing signs of a fragile recovery after a decade of contraction, and while the government has acknowledged that mining is a lifeline to a prosperous future, investment in the sector has stalled.

Nineteen coal exploration projects are underway, But Themba Hawadi, a director at the Zimbabwe Geological Survey, said the country must open up to more investment.

Red tape and resource nationalism mean that an application for an exploration permit could take a year or longer to be processed, he added.

“We are at the stage where we think more (awarding of grants) should be considered,” Hawadi said.

The Zimbabwe Geological Survey has a mandate to monitor and supervise mineral exploration activities under President Robert Mugabe’s government and it has recently increased the application fees from $5,000 to $100,000.-Reuters

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