Zimbabwe: Mining Exploration Works Complete - Sinosteel

19 September 2019

A local unit of Chinese-owned Sinosteel has completed preliminary exploration works on some if its mining claims -- Lupane in the Matabeleland North Province, where it intends to produce methane gas for power generation, a senior official has said.

Sinosteel is the majority shareholder in Zimasco, Zimbabwe's largest ferrochrome producer, which in turn owns 90 percent of Shangani Energy Exploration (SEE), the company that intends to extract methane gas and build a power plant.

About US$780 million is needed for the project to be implemented in three phases from exploration to full scale power generation of 400 megawatts over a 10-year period.

The investment is part of the US$1 billion deal signed by President's Mnangagwa's administration and Sinosteel in May 2018, which will also see building of additional chrome smelters at Zimasco's Kwekwe smelting complex and in Mberengwa.

The project is among those expected to stabilise the country's power supply, currently choked by low generation at the major production plants. Zimbabwe's power situation remain desperate, with customers enduring very long periods of blackouts.

Preliminary works complete

SEE has carried out preliminary exploration work on two of its three special grants, where six core holes were drilled and three production wells sunk, spokesperson Ms Clara Sadomba said last week. This was followed by pumping water from production wells which demonstrated gas and water can be produced.

"There is evidence of the existence of a considerable methane gas resource whose viability now needs to be proved," Ms Sadomba said.

"The first step towards obtaining this information is additional pumping of water using larger pumps in order to release commercial quantities of the gas," she added.

SEE has just concluded a consulting contract with the petroleum geologist with extensive experience to produce a work programme with accompanying expenditures.

"The programme will build on the preliminary works already done and will include more in depth exploration work to confirm the commercial quantities of methane gas hosted by the three special grants as part of the feasibility work", said Ms Sadomba.

The next phase of work is the more intense exploration work, which will start with the installation of bigger pumps on the three wells to drain water so that the gas can be released as part of work to establish commercial viability. The three pumps, generators and other pieces of equipment for this next phase of exploration have been purchased and are in the country, ready for the installation.

"This forms part of the work programme being developed by the consultant. SEE is keen to facilitate the process and get this next phase of work started as early as possible. It is anticipated that this work will commence in late 2019," said Ms Sadomba.

In addition to power generation, an integrated petrochemical industry will be established with the creation of new jobs and new revenue streams for the nation. The whole CBM industry has the potential to create an economic boom for Zimbabwe.

Ms Sadomba said: "Sinosteel and its partners have enough funding to develop the project. The successful completion of the feasibility work to ascertain the commercial viability of the project is the key requirement for the release of funds."

Coal bed methane reserves were first discovered in the Mat North province some decades ago but commercial exploration has failed to take off due to lack of investment.

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