Although demand for coal has stuttered due to the increasing dependence on oil and gas for transport and other industrial processes, coal appears to be making a significant comeback, particularly in heavy industry, and its dominance as a fuel of choice in electricity generation and cement works across the globe is winning it great support on international markets.

Hydro generators are being viewed as prone to droughts, particularly in the southern Africa region, resulting in new power generation projects focusing largely on coal-dependent thermal power plants.

Chamber of Mines president Victor Gapare, said Zimbabwe had abundant coal deposits, but these required significant capitalisation.

He said there were two major basins where the coal could be extracted. These were the Zambezi Basin, in the north, which runs over into neighbouring Zambia and Mozambique, and the Sabi-Limpopo Basin in the south, which runs over into the Limpopo province of South Africa.

These have an estimated tonnage of in situ coal of 26 500 million tonnes, of which 10 500 million tonnes is extractable.

Oliver Maponga, a business development manager with Zimbabwe Stock Exchange (ZSE)-listed Hwange Colliery Company Limited (HCCL), said: "If fully developed, this resource will make the southern African region a coal-mining hot spot, similar to the copper-mining hot spot of Central Africa."

In a recent announcement to the market, Sable Mining said it would acquire an 80% interest in Monaf Investments, which holds the Lubu coal concession in the Bulawayo mining district.

The Lubu coal concession is about 120km north-east of HCCL. The concession was originally explored by Messina Transvaal Development Services (MT-D), which estimated the area had an inferred resource of 334 million tonnes of low-sulphur coal.

The resource is principally located in the 14m to 18m thick main seam, which is also believed to contain coking coal in its lower section.

Sable said the portion of Lubu for which the resources have been calculated holds the potential for open-cast mining.

Considering likely extensions to the coal seams below the overlying Karoo sandstone, it had been estimated by independent consultants Behre Dolbear & Company that with further exploration and drilling, there was potential to increase the coal resource at Lubu to 515 million tonnes.

Last month, a new junior miner, Lontoh-Coal, said it planned to list on the Johannesburg Securities Exchange (JSE) between October and November this year.

The company is currently in the process of raising $16-million through a private placement. It would commit part of the money towards feasibility studies and the re-opening of a closed mine in South Africa.

The balance would be used for the initial development of Lontoh's flagship asset - the 51%-owned Lubimbi project in north-west Zimbabwe near HCCL which had an indicated resource of 1.25 billion tonnes of thermal and coking coal that could be mined using open-cast methods.

The project area is 35km from the Dete siding on the Bulawayo to Victoria Falls railway line, while Lontoh also holds 51% of two smaller projects in the same area.

Kgadima said the aim in Zimbabwe was to produce two million tonnes of thermal and coking coal annually, of which one million tonnes would be exported through the Matola terminal in the Mozambique port of Maputo and the rest sold to customers in Zambia and the Democratic Republic of Congo.

Apparently, the interest in Zimbabwe's coal has long been evident, with investors from as far away as India and China, as well as South Africa, said to have been positioning themselves for acquisition of key coal mining assets over the past decade.

The Indian government has particularly expressed significant interest in Zimbabwe's coal, and had pledged to invest in coal mining assets.

Coal Videsh Ltd, a Chinese firm, had entered into talks with the Zimbabwe Electricity Supply Authority Holdings for drilling and exploration rights over a 75 square kilometre greenfield coal block in Hwange under a proposed joint venture.

Nothing much, however, has come out of that proposed joint venture. The Chinese have already signed several memoranda with local firms, both private and government owned, for coal mining projects, as well as for thermal power plants.

By The Times (SA)