eBusiness Weekly
Golden Sibanda
Supply of coal to Hwange Power Station (HPS) may be compromised in the near future following revelations that coal miner; Hwange Colliery Company Limited (HCCL) lost a special grant for claims it intended to exploit to guarantee adequate coal supply to State power utility, Zesa Holdings.
The Special Grant HCCL lost was located in the Western Areas Coalfield, approximately 20 kilometres south west of Hwange town, in Matabeleland North province.
The coalfield sits adjacent to HCCL’s Mining Lease number 1 (Option Area), in the Deka Safari area, which sources say are only enough to last the next 10 years. The claim was given to a private company under unclear circumstances according to the coal miner.
HCCL was issued with Special Grant 5950 to explore for coal and coal bed methane in the Western Areas Coalfield. In November 2017, Hwange Colliery Company signed a $5 million exploration drilling contract with Fugro Earth Resources (Pvt) Limited and work was expected to commence in 2018.
The loss of the Special Grant comes as Zimbabwe’s coal suppliers are already struggling to meet the daily coal supply requirements of Zimbabwe Power Company (the electricity generating unit of ZESA) while the power utility will need more coal when Hwange Power Station expansion project is completed.
It is expected that the construction works for the HPS capacity extension project, which started last week, will take about 24 months. HPS will have its capacity extended by 600 megawatts through addition of 2x300MW generators.
The new power plant will have an average lifespan of 25 years, but may far outlast the design lifespan much the same way Hwange Power Station units 1 to 6, which were completed in the mid 1980, have done well after life extensions.
HPS is one of Zimbabwe’s two most important power stations, together with 1050MW Kariba South Power Station, as the plant produces the bulk of the electricity that is used in the country both during peak and off peak periods.
Power is a one of the key enablers for virtually every nation’s economic prosperity.
The Hwange Power Station, which will have just over double its current electricity production capacity (700 megawatts) on completion of the ongoing US$1,4 billion expansion programme, will require 6,500 tonnes of coal per day.
Without adequate coal supply to HPS, Zimbabwe would struggle to cope with the demand for power, which stands at 1 600MW against current average production capacity of 1400MW. The deficit is met through imports.
Efforts to get a comment from Mines and Mining Development Minister Winston Chitando and Hwange Colliery Company Limited public relations manager Rugare Dhobbie were not successful by the time of going to print yesterday.
However, Business Weekly is reliably informed that HCCL, a Government owned entity, is now considering re-engaging Zesa’s power generation unit-Zimbabwe Power Company (ZPC)-to renegotiate current coal supply agreements.
This comes amid concerns that HCCL, one of Zimbabwe’s two major coal miners, may in future struggle to deliver agreed quantities of coal if it does not regain possession of the Western Area claims, which it held through a special grant.
Well placed sources at Hwange said the Special Grant has already been granted to a private player who has made no real effort to develop the coal field, which HCCL had already mobilised US$5 million to begin exploration.
The purpose of the exploration was to South African Mineral Resource Committee (SAMREC), a code for reporting of exploration results, mineral resources and reserves.
HCCL lost the SG despite administration of mineral claims falling under the Ministry of Mines and Mining Development-an arm of the Government-which owns both Hwange and ZESA, which gives the State full control over the issue.
HCCL has reportedly since lodged an appeal to Government, through the Mines Ministry, to have the granting of the special grant to a private player reversed, given its implications.
“Hwange lost the Special Grant for claims in the western area after the grant expired and before Hwange could get approvals for renewal of the special grant, which the company had applied for, it was granted to a private player.
“It seems the private player who was granted the Special Grant for the Western Areas Coalfields had been waiting in the wings because as soon as the period for HCCL’s Special Grant expired, it was expeditiously granted to someone else.
“Without the special grant, Hwange may not be able to supply adequate coal to ZPC as already provided for in the current agreement and may also not be able to meet supply requirements for Hwange Power Station,” the source said.
In a related case, Zambezi Gas, a coal mining company, which also operates in the Hwange area, went ballistic last year after losing of 11 720 hectares of land allegedly to Makomo Resources under unclear circumstances.
Zambezi Gas management, just like in the case of Hwange, suspect some officials in the Ministry of Mines and Mining Development could have been involved in the underhand dealings considering that they allegedly arranged for some “investors” to partner them.
But Makomo Resources director Mr Raymond Mutokonyi is on record saying they did not grab land from Zambezi Gas.
Mr Mutokonyi said they applied for their special grant, like anyone else, failed four times, but were eventually granted the claims.
