The Zimbabwe government expects coal bed methane (CBM) exploration to resume by December after a local company invested US$63mn in a joint venture with a state-owned enterprise.
Sakunda Energy invested the money in the project that it is executing with the Zimbabwe Mining Development Corporation (ZMDC), a general mineral exploration and development entity.
Sakunda holds 60% of the project in Lupane-Lubimbi, an area located 600km southwest of Harare, the capital city, while ZMDC holds the other 40%.
Fred Moyo, the deputy minister of mines and energy told NGW October 11: “For now, as the government, we don’t have much money to fully explore for gas. This new investment, which is coming from the private sector, is coming into an area [CBM exploration] that has lagged behind. There is scope for private sector participation in mining.”
He added that the government hopes work will begin by December or early in 2018. ZMDC has two concessions in Lupane-Lubimbi but halted exploration around 2014 after funds ran out.
Zimbabwe’s Minister of Mines, Walter Chidhakwa first announced the Sakunda deal in December 2016 but did not disclose the source of the funding which he later did in May this year.
Zimbabwe has CBM deposits in a western province where most of the country’s coal is mined, but lacks the funding to explore more and develop the resource. Foreign companies, unhappy with government policies, have largely shunned investing into CBM. The government estimates deposits of around 5 trillion ft3 with a purity level of at least 95%.
Five companies have been exploring for CBM in the Lupane area in recent years. Only Discovery Investments, which was awarded a 25-year production licence in 2014, has finished the work but requires US$100mn to build a gas-fired power station.