ZIMBABWE needs to codify legislation governing mining operations in the country in order to attract investors and manage the sector effectively, Liberation Mining technical director Peter Mutsinya said.
Mutsinya told businessdigest in an interview this week that mining companies faced a lot of legal hurdles in setting up mines because of the number of laws relating to the industry.
Mutsinya said that Zimbabwe had 45 legal Acts which interact on the mining sector, 60 different statutory instruments/regulations, 15 ministries and 20 local governing bodies that are directly or indirectly involved in the business.
"There is need to codify the pieces of legislation governing mining so that the laws are harmonised. Government, together with the mining industry, should come up with a mining code or national mineral policy for the purposes of smoothly operationalising the sector," Mutsinya said.
"We should come up with a mining administrative and operating procedure manual. At the moment you can imagine dealing with 15 ministries, 45 acts, and 60 different statutory instruments. On top of that, they are 20 local boards."
He said his company, Liberation Mining, required a capital outlay of US$369,3 million to start mining on the Lubimbi coal project in Matabeleland North. The Liberation Mining project is situated about 60km south of Binga in the Gwayi-Shangani catchment area and 80km east of Hwange town.
The nearest suitable railway siding from the proposed working site is Dete, which is 54km from Gwayi.
Mutsinya said the company had completed feasibility studies on the coal mining project, adding a total US$138,8 million would be needed in the first year for pre-stripping, open cast mining, engineering and infrastructure capital as well as indirect costs.
A further US$79,6 million would be required in the second year, which would be enough to get the mine to a desirable output.
Mutsinya said that with at least more than five power generation licences issued out to date and two coal to liquid plants scheduled for production in the next two-three years, coal demand would outstrip supply, which is currently forecast at 5 million tonnes/year.
He said this would move to between 12-15 million tonnes/year in the next 5 years and to 20 million tonnes per annum by 2030.
Zimbabwe has a total 30 230 million metric tonnes in reserves.
According to the United Nations Environment Programme Collaborating Centre on Energy and Environment, Lubimbi has the highest coal reserves at 11, 8 billion metric tonnes followed by Hankano at 7,8 billion metric tonnes and Mkushwe at 4,3 billion metric tonnes. Hwange is the sixth largest with 480 million metric tonnes while Sengwa, which has 480 million metric tonnes, is the eighth largest.
The project consists of the A/B export grade with 15-30% yield, the power station coal product with 50-60% yield and coking coal product with a 3-10% yield.
Mutsinya said there is a potential to produce oil from lower grade and coal shale by Fischer method based on historical assessment and information on the Lubimbi coalfield studies.
The average oil content ranges from 3-8% in the deeper remaining areas four seams namely B,C,D and E can be mined by underground mining methods which could produce the total tonnage which is well above 1 billion metric tonnes of similar or better products than those described above for the open castable area.
Mutsinya said there were other project development options and opportunities. He said the company would look at alternative energy sources as well as coal gasification opportunities.
A 2000 MW Power station can also be developed in partnership with major energy mining firms while there was the potential of an 80 000 barrels per day coal-to-liquids factory.
To date the company had surveyed 70km, completed 233 beacons and drilled 250 boreholes.
In terms of exploration diamond drilling, phase 1 (consisting of 850ha) had shown an estimated insitu reserve of 600 million tonnes inferred. This had been done in 2010. The latest exploration phase conducted in 2011 and covering 11 000 hectares had shown 1 billion tonnes of indicated resource.
Challenges that had been brought to the fore by an EnvironmentaI Impact Assessment report the company had undertook was that they would have to co-exist with the Zambezi Water Project and the Gwayi-Shangani Dam, the wall of which will be 32km downstream.
"We will have to contend with mine flooding if the dam reaches full height post mine life," he said.
Mutsinya said that would be contaminated through cracks and there was need for acid drain management.