Government of Zimbabwe this morning signed an agreement with Australian consultancy firm, Victoria Consultancy, to market its coal to huge coal consuming Asian markets such as India and Japan, 263Chat Business can reveal.
Currently, Zimbabwean coal has only established market links within the SADC region and China.
Speaking at the signing ceremony at Munhumutapa office, Mines and Mineral Development Minister, Winston Chitando said the agreement entails the Australian firm to boost coal export markets for the country.
“As a country we have had limited exports of coal and they have mainly been limited to the region and exports have been to China. The agreement today entails Victoria Consultancy performing a number functions, firstly, finding markets for us,” said Chitando.
However, the biggest elephants in the room are lack of capital and low production within the mining sub-sector.
Currently Zimbabwe is producing between two and three million tonnes of coal per annum in contrast to 52 million tonnes imported by India on a yearly basis.
“We are aware that we have got two constraints for us to be able to deliver. The first constraint is the capital to take the coal out. We do have over 10 active coal projects in the country at the moment but for us to be able to meet the volumes there are two things we needs, capital and secondly to increase production,”
“We are fully aware we also need to invest in the logistics. We are targeting the production at this stage mostly the Hwange area which we have Tomlinson Junction as a major hub in terms of delivering and transportation but all that need upgrade,” added Chitando.
The coal sub-sector is central to the country’s 2023 mining vision of creating US$ 12 billion annually from the sector.
India imports 52 million tonnes of coal annually and has imported 15 million tonnes during first quarter of 2019.
But for Zimbabwe to fully utilize immense opportunities in the Indian market, it has to leverage on good rapport with the Asian economic giant, more so with the India-Africa Forum that facilitates financing.
“We have an excellent rapport between us and India and His Excellency Prime Minister Modi and currently we can see that India now has the India-Africa platform or Forum were India is putting billions of dollars to us as Africa so we should take advantage of this India-Africa forum to finance and capitalize our industries,” said President Emmerson Mnangagwa who witnessed the signing of the agreement.
Victoria Consultancy representatives assured the Minister of its massive links with Indian market and will ensure more coal reach the Asian country.
The development comes at a time Zimbabwe is enduring serious power cuts due to low water levels at Kariba Dam and low production of coal at Hwange thermal power station prompting analysts to be curious of the agreement with the Australian consultancy firm.
“We need to first find a solution to production before we talk about marketing that which we have not yet been able to produce. Production should be our key focus area for now,” economic expert, Pepukai Chivore told 263Chat Business.
