By Oliver Kazunga
Matabeleland North-based coal mining company, Zambezi Gas plans to double output to 200 000 tonnes in the next three months after the miner received a major boost from an unnamed local investor.
The firm is one of Zimbabwe’s biggest coal producers. Briefing Mines and Mining Development Minister Winston Chitando and Finance and Economic Development Minister Professor Mthuli Ncube during a recent tour of colliery companies in Hwange district, Zambezi Gas operations director Engineer Menard Makoto said:
“We got an investor (locally) who gave us a push-start and now we are now looking forward to doubling our production to 200 000 tonnes of coal per month.”
At present, he said 60 percent of their output was going to the Zimbabwe Power Company’s thermal power stations dotted across the country.
The fact finding mission, which is a precursor to President Mnangagwa’s visit to colliery companies in Hwange district within the next few weeks, also saw the two ministers touring Zimbabwe ZhongXin Coking Company, Afrochine’s associate Dinson Colliery, Jinan Coking Coal Project and South Mining Coking Coal Project.
Eng Makoto said despite being consistent in terms of supplies to ZPC, the challenge was on pricing and forex retention.
“We are getting paid US$30 per tonne and we get this amount at interbank rate, if we get to the banks we can’t get the forex. So, it becomes a big challenge to us.
“We have presented that to ZPC and they said ‘we understand you, but we are waiting for the approval from the Minister of Finance,” he said.
“Our indications were that they give us 50 percent in foreign currency so that we are able to buy spares for our machinery as everything in terms of the spare parts comes from outside the country.”
Eng Makoto appealed to Government to come up with a coal supply pricing structure that is comparable with regional countries.
He said Zambezi Gas supplies all industrial sectors locally but the company was failing to meet demand because of the existing coal pricing model.
“On exchange rate, we appreciate the liberalisation that you did, but its far short. For instance, this morning we wanted to buy diesel from Petrotrade and they said we can’t give you diesel in RTGS, they wanted us to pay 50 percent in US dollars,” he said.
Eng Makoto said they have through the Coal Producers Association, been pushing for Government to increase the forex retention levels to 80 percent from the prevailing 50 percent to boost their operations.
“Right now, we are opening the other pit but we can’t open it without the foreign currency,” he said. The Chronicle