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Zimbabwe's coal output set to quadruple as investors arrive

Thu, 15th Mar 2018 13:08

* Says also looking at solar to address energy deficit

* Anyone investing more than $100 million gets special terms

* Lithium, platinum also luring investors

By Barbara Lewis

LONDON, March 15 (Reuters) - Zimbabwe has attracted around$300 million in its coal industry that will quadruple productionnext year versus 2017, its mining minister told an investmentconference in London on Thursday.

The country, which says its abundant mineral resourcesinclude more than 40 exploitable minerals, is seeking to lureforeign investment to reboot its economy after a coup thatpushed out veteran leader Robert Mugabe last year.

Minister of Mines and Mining Development Winston Chitandosaid interest had focused on coal, as well as on lithium andplatinum.

He was speaking to investors in London, attending his firstconference on Zimbabwe outside Africa since taking office.

In Cape Town in February, he had said battery minerallithium was among the most popular deposits.

He told London investors coal output in Zimbabwe would reachmore than 8 million tonnes next year compared with around 2million in 2017. Speaking to Reuters on the sidelines of theconference he said that followed investment of around $300million. He did not name the investors.

Zimbabwe says it is trying to develop solar power too, butneeds to address its energy needs, which are responsible foraround 25 percent of its import bill because of a shortfall indomestic generation.

Many miners see a strong business model in coal as ahigh-margin business and a cheap way to generate power in remoteAfrican communities.

The world's biggest shipper of export quality coal Glencoresays the best coal will generate profits for theforeseeable future because of a shortage of new supply followinga collapse in investment during the 2015-16 commodity downturn.

It says there is still demand, despite environmentalopposition to the most polluting fossil fuel.

Zimbabwe is at the same time trying to promote thoseminerals that serve a cleaner world economy.

Speaking in Cape Town in February, Chitando announced alithium deal. In London, he said another would soon follow. Healso said there was interest in Zimbabwe's platinum reserves,which are second only in scale to those in South Africa.

International companies seeking to develop lithium inZimbabwe - which Chitando has said could meet around a fifth ofthe world's needs - include Prospect Resources andChimata Gold.

As terms for foreign investors get tougher in some Africanjurisdictions, notably Democratic Republic of Congo, manyinvestors welcome Zimbabwe's promise of a stable environment andregulatory certainty as well as a crackdown on corruption.

For anyone investing more than $100 million, Chitando saidthere would be a special mining licence, meaning particularlyfavourable conditions, such as negotiating royalties.(Editing by David Evans)

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