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Minister Chidhakwa

Tinashe Makichi Business Reporter
Government has secured a $60 million financial package for the Lupane’s coal-bed methane gas concessions which were awarded to the Zimbabwe Mining Development Corporation.

Mines and Mining Development Minister Walter Chidhakwa said the package would bolster the exploitation of coal-bed methane gas in the Lupane-Lubimbi area.

“As a ministry we are putting in $60 million for the development of gas in the Matabeleland North in the Lupane-Lubimbi area,” said Minister Chidhakwa on the sidelines of the Gold Sector awards.

Natural gas reserves were discovered in the Lupane-Lubimbi area, in Matabeleland North a few decades ago but commercial exploitation has been failing to take off.

Exploration and pilot production works were conducted which showed that the resource can be exploited commercially for domestic and industrial use.

To date Discovery Resources is the only company that has made progress at its concessions in Siwale area in Mzola, Lupane. After successful exploration work in the last two years, the firm has started producing gas, which engineers say is ready for commercial exploitation.

Lupane Gas, a unit of the Industrial Development Corporation, which has been doing some exploration work on one of the sites failed to raise the $12 million required to prove whether the resource is commercially viable or not.

Hwange Colliery Company Limited has also failed so far to grab the opportunity to diversify its operations by exploiting gas on its Lubimbi coal concessions.

Another company, China Africa Sunlight Energy has, since 2014, failed to bring tangible results. The firm had proposed to invest in gas wells for power generation as well as setting up a 600MW thermal power plant.

In an era where oil and gas are driving the global economy, Zimbabwe stands to benefit immensely from the exploitation of gas, which accounts for around 23 percent of the global commercial energy mix, according to the Organisation of Petroleum Exporting Countries.

The appetite for gas consumption is also growing in Zimbabwe with the Zimbabwe Energy Regulatory Authority reporting that the country has experienced a significant rise in household consumption of liquefied petroleum gas in the past three years.

Through exploitation of coal-bed methane gas, analysts say Zimbabwe could turn from a net importer of fertilizers to a net exporter.

Coal-bed methane gas is used to produce hydrogen, which in turn is used in the manufacture of ammonia for fertiliser. Fertiliser maker, Sable Chemicals, has also hinted on plans to transform its production processes to using gas as opposed to high cost electricity.

Ironically, Zimbabwe still imports the product mainly from South Africa, years after discovering its own reserves.