Zimbabwe has signed a $1 billion deal with Sinosteel Corp in a development that will see the Chinese firm building a 400 megawatt coal fired power plant, the local paper Herald reported on Monday.
The investment will be implemented in phases in Matabeleland North Province. The ferrochrome smelters at Zimasco will create nearly 25 000 jobs.
The first phase will involve the drilling of two Coal Bed Methane (CBM) wells at the Shangani grants to fire a 12MW pilot power station, President Mnangagwa told reporters at a signing ceremony.
Under the second phase, more productive wells will be drilled and a 400 MW plant set up.
“We are gathered here today to witness our country taking massive strides to tap into coal bed methane industry,” President Mnangagwa said.
“As a country, we are endowed with a substantial number of minerals most of, which are still to be exploited including coal bed methane. The untapped sector presents unique and competitive investment opportunities.”
Sinosteel has also agreed to build two ferrochrome smelters in Zvishavane and another one in Kwekwe, where it already operates the country’s largest ferrochrome plant.
Mines and Mining Development, Minister Winston Chitando, signed the deal for the projects on behalf of the Government, while the Chinese firm was represented by its president, Andong Liu.
Coal bed methane reserves were first discovered in Matabeleland North some decades ago, but commercial exploration has failed to take off due to lack of investment.
The electricity from the power plants will be used by Zimasco’s chrome smelting operations with excess supplied to the national grid.
Apart from electricity generation, CBM can also be used in fertiliser and Liquefied Petroleum Gas production.
President Mnangagwa said the signing of the agreement with Sinosteel, the majority shareholder in Zimasco, was testimony of his administration’s wilingness to open up the economy to investment and re-engage the global community to do business with Zimbabwe.