ESSAR Africa Holdings says it intends to begin constructing its 600 megawatt power plant within the next 36 months so as to provide uninterrupted electricity to its multi-million-dollar projects in Redcliff and Chivhu.
Essar acquired a 54 percent stake in steelmaker Ziscosteel in 2011 in a US$750 million deal.
Although Essar has elected to remain mum about the cost of the power project, authoritative sources say it is expected to gobble an estimated US$1 billion.
A feasibility study of the venture is presently underway.
National power utility Zesa is struggling to provide uninterrupted power because of obsolete equipment and inadequate funding to bankroll its expansion projects.
It is envisaged that the excess power that will be generated from the power plant will be fed into the grid.
Essar said the power project is intended to be developed in two phases of 300MW each.
“The timing of the development of this plant is largely dependent on the availability of a suitable coal mine for the plant’s feedstock and the conclusion of power off-take agreements with key power consumers in Zimbabwe as well as the national grid or Southern African Power Pool.
“Ideally Essar would seek to develop phase 1 of the power project within 36 months,” said Essar.
The Zimbabwe Energy Regulatory Authority recently told The Sunday Mail Business that 22 independent power producers, including Essar, have been licensed to start power projects.
Zera chief executive officer Mrs Gloria Magombo indicated that Essar has two thermal power projects – the 600MW project in Hwange and a 60MW in Redcliff.
She said some of the IPPs are linked to developments in other economic sectors such as the revival of New ZimSteel.
It is understood that Essar would want more electricity to power its iron ore beneficiation project in Chivhu.
The beneficiation project is also expected to be a million-dollar investment that is capable of transforming Chivhu into a modern urban centre and create thousands of jobs.
It is believed Government, through the Ministry of Mines and Mining Development, has resolved issues related to the issuing of a Special Grant for iron ore exploration at Mwanesi.
The Ministry will also second people to the exploration work to be undertaken by New Zim Minerals, a subsidiary of Ziscosteel, to ensure the grant is explored jointly between Essar and Government.
While the exploration of Mwanesi is expected to be undertaken over the next two to three years, the intention is that New Zim Minerals would start mining the high quality portion of the Mwanesi iron ore body in the next 12-18 months.
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