Zimbabwean Smelter Ready to Produce, Burn Gas
Zimbabwe's largest ferro-chrome producer is working to switch over to gas-fired generation after it secured a three-year extension of its special grants for coal-bed methane (CBM) exploration. Shangani Exploration Energy (SEE), jointly owned by the ferrochrome producer Zimasco Holdings and its parent company, China’s Sinosteel Corporation, had its three exploration grants worth $780mn approved on August 4, after a three-year wait.
SEE plans to construct a 400-MW gas-fired power station on the concession to help boost chrome production at Zimasco.
An independent mineral economist Norman Mukwakwami told NGW August 14 that a switch from grid electricity or coal will enable Zimasco to save on its power bill and reduce its carbon footprint. "Zimasco is obviously a huge consumer of energy for its smelting operations and this drive towards CBM development is designed to reduce costs related to its energy consumption," said Mukwakwami, a research coordinator at Harare-based Centre of Natural Resource Governance.
"I am unsure if their plant is designed to burn coal or use grid electricity but if they use the former, CBM will make their operations greener. Yes, CBM is not too green but it is greener than coal. If they rely on the grid, CBM will reduce their electricity bill substantially. Also, if you consider that Zimbabwe meets almost 50% of its electricity demand through costly imports Zimasco's move will be good in terms of import substitution."
While SEE had its exploration grants extended for three years, another CBM concession holder, Zambezi Gas had its licences extended by 25 years. Zambezi Gas has been producing coal on its 19,000 ha concession in western Zimbabwe since 2014.
Mukwakwami said burning diesel is an unviable option for Zimasco, highlighting that a local privately-owned 100-MW diesel-fired emergency power generating plant collapsed within months of launch this year because of the high cost of the fuel. A national power utility refused to buy the expensive electricity.
The extension of the grants, Zimasco said, will make it more attractive to investors to fund CBM development, according to a report in AllAfrica August 10. A Chinese consortium, said Zimasco judicial manager Reggie Saruchera, has pledged to invest $120mn provided the grants were extended.
"It is very possible Zimasco can clinch the required investment for CBM development," said Mukwakwami. "They already have a Chinese investor within their ranks. It will not be too difficult for them to secure investment from the same market."
Thulani Mpofu