Makomo Resources planned to spend $1.5 billion (R16bn) on a 600-megawatt coal-fired power plant and it would start exporting the fuel to steel makers in southern Africa, Zimbabwe’s largest coal producer by output said earlier this week.
Construction of the plant would start in 2018, finance director Tendai Mungoni said, noting that Makomo would finance the plant together with Chinese investors he declined to identify.
Firms including Sinosteel’s Zimasco plan to build power plants in the country, which does not generate enough for its needs. Zimbabwe, with the biggest known reserves of platinum after South Africa, has coal resources of as many as 15 billion tons, government estimates show.
“We expect to spend about $1.5bn on that power plant,” Mungoni said. “We have lined up very keen investors, some from the region, some offshore – the Chinese.”
He said that Makomo was 60 percent owned by a group of Zimbabweans, while British and South African investors held the rest. The country mined 4.9 million tons of coal last year, with Makomo’s output comprising 75 percent of that, overtaking Hwange colliery as the largest producer of the fuel, according to the country’s Chamber of Mines.
Makomo has a contract to supply 60 000 tons of coal a month to the state-owned Hwange power plant, the nation’s biggest such facility, with 920MW installed capacity.
Zimbabwe Power, which operates the station, asked Makomo to double supply for last month and next month, Mungoni said.
It also supplies 10 000 tons monthly to the country’s three smaller thermal plants.
Zimbabwe is expanding power generation capacity to curb blackouts that have paralysed mines and industry. It produces an average of 1 300MW of power, compared with peak demand of 2 200MW, resulting in daily rationing and electricity cuts.
The company plans to raise monthly capacity to as many as 350 000 tons monthly by the end of the year from about 250 000 tons now.
Makomo wanted to export coking coal, used in steel making, moving 20 000 tons this month and increasing this to 80 000 tons from next month, Mungoni added. – Bloomberg
