The Sunday Mail
Senior Business Reporter
GOVERNMENT has granted Sakunda Holdings, a company with diverse interests in energy and minerals, a coalbed methane (CBM) concession in Mbungu, Matabeleland North province, where the firm intends to set up a power plant.
The special grant (5 755) — measuring about 333 000 hectares — was previously owned by State-owned Zimbabwe Mining Development Corporation (ZMDC), which now becomes a minority partner in the new venture.
While providing an update on the partial restructuring of State-owned entities on Thursday, Finance and Economic Development Minister Professor Mthuli Ncube indicated that Sakunda had been granted a special grant for coalbed methane.
Sakunda chief operating officer Mr Charles Chitambo confirmed to The Sunday Mail Business that the company was now working with ZMDC on a special grant for coalbed methane in Matabeleland North.
“I can confirm that we are indeed working with ZMDC on a coalbed methane special grant in Lupane area,” he said.
“We are assembling technical teams so that we can feed necessary expertise in the boxes. As what we intend to do, it all depends on the amount of the resources. At that stage we will be clear on what to do.”
Zimbabwe has huge deposits of untapped CBM gas in the Hwange, Lupane and Gwayi areas.
Over the years, drilling and desorption tests have been conducted and resources that run into trillions of cubic feet have been discovered, according to Government’s geological department.
Chinese firm Sinosteel has already completed preliminary exploration works on some of its CBM claims in Lupane.
Sinosteel is the majority shareholder in Zimasco — Zimbabwe’s largest ferrochrome producer, which, in turn, owns 90 percent of Shangani Energy Exploration (SEE).
SEE plans to exploit methane gas and build a power plant.
According to Sinosteel, an investment of about US$780 million is needed for the project to be implemented in three phases, from exploration to full-scale power generation of 400 megawatts over a 10-year period.
The investment is part of the US$1 billion deal signed by President’s Mnangagwa’s administration and Sinosteel in May 2018, which will also see the building of additional chrome smelters at Zimasco’s Kwekwe smelting complex and in Mberengwa.
The project is among those expected to make the country energy self-sufficient.
SEE has carried out preliminary exploration work on two of its three special grants, where six core holes were drilled and three production wells sunk.
Overally, the assessment demonstrated that gas and water could be produced.
Although there is evidence proving the existence of a considerable methane gas resource, investors are in the process of establishing whether it can be exploited commercially.
The Chinese company completed a consulting contract with a petroleum geologist with extensive experience to produce a work programme with accompanying expenditures.
The programme will build on the preliminary works already done and will include more in-depth exploration work to confirm the commercial quantities of methane gas hosted by the three special grants.
The next phase of work would be the intense exploration work, which will start with the installation of bigger pumps on the three wells to drain water so that the gas can be released as part of work to establish commercial viability.
In addition to power generation, an integrated petrochemical industry, which has the potential to create new jobs and new revenue streams for the nation, will be established.
The whole CBM industry has the potential to spur local economic growth.
Matabeleland North is endowed with natural resources that can change the economic complexion of the province if exploited under a win-win arrangement.
President Mnangagwa, who was on a tour of coal mining companies in Hwange last week, called on mining companies operating in the country to partake in infrastructure development for the benefit of communities they operate in.
He made the call while officially opening South Mining (Pvt) Limited’s coking coal plant in Hwange.
He visited Western Coal and Energy Company’s Western Areas coal project, South Mining’s coking plant, Jin An’s Tutu coking plant, as well as Hwange Colliery Company’s Chaba Mine.
Local communities expect to benefit from infrastructure and employment created by firms exploiting natural resources in their areas.