10 August 2017

Zimbabwe: Shangani to Invest $120 Million As Gas Permit Is Extended

GOVERNMENT has extended Shangani Energy Exploration and Zambezi Gas Zimbabwe's special grants for coal bed methane gas exploitation, The Financial Gazette can report.

The special grant for Shangani Energy was extended by three years to 2020, while that of Zambezi Gas was extended by 25 years.

Zambezi Gas is also into coal mining in Hwange.

Shangani Energy is jointly owned by Zimbabwe's largest ferrochrome producer, the Zimbabwe Mining and Smelting Company (ZIMASCO) and its parent company, China's Sinosteel Corporation.

In a Government Gazette published last week, Munashe Munodawafa, the permanent secretary in the Ministry of Mines and Mining Development, said: "It is hereby notified that the Minister of Mines and Mining Development, with authorisation from the President, has, in terms of section 301 of Mines and Minerals Act (Chapter 21:05) extended special grant number 1806 for Shangani Energy Exploration (Private) Limited, for a period of three years with effect from August 4, 2017 to August 3, 2020."

Munodawafa added that his ministry had also extended the tenure of special grant number 4084 to Zambezi Gas for a period of 25 years with effect from August 4, 2017 to August 3, 2042.

In an interview yesterday, judicial manager for ZIMASCO, Regis Saruchera of Grant Thornton, said the renewal of the special grant would enable the company to source funding to start work on the gas project.

Saruchera said they were in discussions with potential investors.

"It now gives us an opportunity to source for investors who want to invest in the coal bed methane gas. We are right now talking to investors including a Chinese consortium, which I cannot name at the moment because we are still negotiating. The consortium is prepared to inject the required $120 million," said Saruchera.

He added: "Sino Steel (ZIMASCO'S major shareholder) is also prepared to come in so we are right now working on the papers to seal the deal with potential investors."

It is understood that Shangani Energy also plans to build a 400 megawatts power station on the concession.

The project will be carried out in two phases, with the first expected to take 18 months to complete.

newsdesk@fingaz.co.zw

Zimbabwe

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