GOVERNMENT plans to sign a $700 million deal with an investor that will develop a coal-bed methane site, Mines and Mining Development Minister Winston Chitando, said.
The imminent deal comes as President Mnangagwa’s administration, which took office in November last year, courts foreign investment to rebuild an economy after years of stagnation and isolation due to Western sanctions under former President Robert Mugabe’s rule.
Production from the proposed site will be used to fuel a proposed power plant while two other deals are expected to be signed in coming months, Minister Chitando said in a phone interview with Bloomberg on Thursday.
“The coal-bed methane projects will be for power and other related products and by-products,” he said, declining to identify any of the investors.
Most of the output from the project to be signed this month will be “channelled toward the establishment of a power plant,” Minister Chitando said.
Zimbabwe’s leadership change has sparked a race for the nation’s mineral riches among entrepreneurs and small explorers although some big-name mining companies have taken a wait-and-see approach.
Zimbabwe has the world’s second-largest platinum reserves after South Africa, as well as large deposits of lithium, coal, gold, diamonds, chrome and nickel.
“You don’t necessarily need the global players, you need investment,” said Minister Chitando, adding: “As long as it’s good-quality investment.”
Areas along the Zambezi corridor are rich in coal-bed methane gas reserves and yet the resource has not been fully exploited to contribute to the economy.
In 2012 China Africa Sunlight Energy proposed a $2,1 billion energy development project that was to be implemented in Lupane, Matabeleland North.
The project still hangs in the balance due to funding constraints.
Pioneers of the project had planned to build a 600 megawatts power station, set up a coal mine and a coal-bed methane gas extraction venture.
The planned investment was expected to boost power generation and create 4 500 jobs. – Bloomberg/Business Writer.