THE Ministry of Mines and Mining Development has defied a Cabinet resolution to reinstate special coal grants to the Zimbabwe Power Company that were withdrawn three years ago, it has emerged.
Report by Bernard Mpofu
Energy secretary Pattison Mbiriri on Monday appealed to Parliament to push for the reinstatement of the grants as the ministry was dragging its feet in restoring them.
Appearing before a Parliamentary Portfolio Committee on Energy, Mbiriri said fossil fuel extracted from the special grants owned by the State-owned power utility were critical in meeting coal demands after it emerged that supplies from Hwange Colliery were inadequate.
Official figures show that Hwange thermal station is receiving 3 500 tonnes of coal daily against a demand of 8 000 tonnes.
ZPC has plans to engage in a joint venture with a private investor to mine coal should the government reinstate the special grants.
In 2010, an inter-ministerial committee on a holistic energy strategy chaired by Deputy Prime Minister Aurthur Mutambara, according to Mbiriri, recommended that ZPC be allocated the Western Area Coal special grants in order to enable the company to implement the Hwange power station expansion project.
“We continue to engage the ministry of mines on the coal concessions and coal bed methane concessions as well and hopefully we can have a meeting of minds and certainly this honourable committee can assist us to that end because as you have rightly pointed out, it is difficult to comprehend how and why where Cabinet has made a ruling, why it is difficult to operationalise that Cabinet decision,” Mbiriri said.
“The cancellation of special grants has adversely affected our planning and projects.
“To some extent, it also adversely impacts on the attractiveness of these projects to potential investors because they ask the fundamental question that ‘if I build my thermal power station, what guarantee is there that there will be adequate coal’ and the only answer we can give at this point is that we have lots of coal in Zimbabwe, we cannot go beyond that.”
Records show that in 2005 ZPC was allocated Western Area Coal mining special grant and Sinamatela special grant in 2006 for the purpose of developing Hwange power station extension.
ZPC partnered with CATIC of China, but the partnership did not bear fruit as ZPC failed to raise its share capital.
In 2008, ZPC formed a joint venture with Post Mining for the same project with a 70:30 shareholding in favour of the former.
In June 2010, the ZPC special grants were cancelled by the Mines ministry.
The ministry has already granted new special grants to other players.