China Africa Sunlight Energy Ltd. said it plans to invest as much as $2.1 billion developing coal mines and building a 2,100-megawatt plant powered by the fuel in Zimbabwe to help ease electricity shortages.
The company, a venture between Old Stone Investments Ltd. of Zimbabwe and Shandong Taishan Sunlight, will start with capacity to produce 300 megawatts by mid-2015 and raise this to 600 megawatts by the end of that year, General Manager Charles Mugari said. The company has spent $20 million on exploration, and was granted rights to look for coal and coal-bed methane in the area in October 2012.
“For our project to be fully operational, we are looking at five years,” he said in an Aug. 29 interview in Gwayi, 703 kilometers (437 miles) southwest of Harare, the capital. “For the coal mining, we are looking at the end of next year. For power generation and coal mining we are planning to sink a billion dollars.” The company also wants to mine coking coal, which is used in steelmaking.
The southern African nation, which has the world’s biggest known reserves of platinum after neighboring South Africa, has capacity to produce 1,500 megawatts against peak demand of 2,100 megawatts, affecting industrial output, according to the Confederation of Zimbabwe Industries. The country has coal resources of 10 billion metric tons to 15 billion tons, according to government estimates.
China Africa Sunlight Energy is working to sell some of its electricity to ZESA Ltd., the state-owned power-generation company, Mugari said.
The coal exploration area, in Gwayi in the western Matabeleland region, has 4 billion tons of resources and China Africa Sunlight Energy is conducting studies to measure how much gas is available, with the results to be known in three months, he said.
“If they discover gas, the way we think they are going to, we want to export the gas overseas to India” in partnership with Discovery Investments Ltd., Mugari said.
Depending on the outcome of the gas study, the company wants to start a program piloting methane gas for domestic gas in Hwange, also in Matabeleland, and extend this to Bulawayo, the second-biggest city, if successful, he said. The projects will create 4,500 jobs, he said.
China Africa Sunlight Energy is looking at the possibility of pumping gas to the port city of Beira in neighboring Mozambique, using an idle pipeline that the National Oil Co. of Zimbabwe once used to bring fuel into the country, Mugari said.
Eskom Holdings SOC Ltd., the state-owned power utility in neighboring South Africa, is spending 105 billion rand ($10 billion) developing the 4,800-megawatt Medupi coal-fired plant, which has been delayed by labor unrest and faulty welds on boilers.
Mozambique has become a prominent destination for energy investment as it looks to develop the largest natural-gas find in a decade.