China Africa Sunlight Energy planned to invest as much as $2.1 billion (R21.5bn) developing coal mines and constructing a 2 100 megawatt coal plant in Zimbabwe to help ease electricity shortages, it said yesterday.
The company, a venture between Old Stone Investments of Zimbabwe and Shandong Taishan Sunlight, would start with capacity to produce 300MW by mid-2015 and raise this to 600MW by the end of that year, general manager Charles Mugari said.
The company has spent $20 million on exploration, and was granted rights to look for coal and coal-bed methane in the area in October last year.
“For our project to be fully operational, we are looking at five years,” Mugari said last week. “For the coal mining, we are looking at the end of next year. For power generation and coal mining we are planning to sink a billion dollars.”
The company also wants to mine coking coal, which is used to make steel.
Zimbabwe, which has the biggest known reserves of platinum after South Africa, has capacity to produce 1 500MW against peak demand of 2 100MW, affecting industrial output, according to the Confederation of Zimbabwe Industries. The country has coal resources of 10 billion tons to 15 billion tons, according to government estimates.
China Africa Sunlight Energy was working to sell some of its electricity to the Zimbabwe Electricity Supply Authority, Mugari said.
The coal exploration area, in Gwayi in the western Matabeleland region, had 4 billion tons of resources and China Africa Sunlight Energy was conducting studies to measure how much gas was available, with the results to be known in three months, he said.
“If they discover gas, the way we think they are going to, we want to export the gas overseas to India” in partnership with Discovery Investments, Mugari said.
Depending on the outcome of the gas study, the company also wanted to pilot the use of methane for domestic gas in Hwange, also in Matabeleland, and extend this to Bulawayo, the second-biggest city, if successful, he said.
The projects would create 4 500 jobs, he estimated.
China Africa Sunlight Energy was looking at the possibility of pumping gas to the port city of Beira in Mozambique, using an idle pipeline that the National Oil Company of Zimbabwe once used to bring fuel into the country, Mugari said.
Eskom is spending R105bn developing the 4 800MW Medupi coal-fired power station, which has been delayed by labour unrest and faulty welds on boilers.
Mozambique has become a prominent destination for energy investment as it looks to develop the world’s largest natural gas discovery in a decade. – Bloomberg