China Africa Sunlight Energy has said it plans to invest as much as $2.1bn developing coal mines and building a 2,100MW plant powered by the fuel in Zimbabwe to help ease electricity shortages in that country.

The company, a venture between Old Stone Investments of Zimbabwe and Shandong Taishan Sunlight, will start with capacity to produce 300MW by mid-2015 and raise this to 600MW by the end of that year, GM Charles Mugari said. The company has spent $20m on exploration, and was granted rights to look for coal and coal-bed methane in October last year.

"For our project to be fully operational, we are looking at five years," he said last Friday. "For the coal mining, we are looking at the end of next year. For power generation and coal mining we are planning to sink a billion dollars." The company also wants to mine coking coal, which is used in making steel. Zimbabwe, which has the world’s biggest known reserves of platinum after South Africa, has capacity to produce 1,500MW against peak demand of 2,100MW, affecting industrial output, according to the Confederation of Zimbabwe Industries.

The country has coal resources of 10-billion to 15-billion metric tonnes, according to government estimates. Outgoing Energy Minister Elton Mangoma has begun refurbishing the Kariba Dam hydroelectric plant and the Hwange thermal power station to boost supply.

China Africa Sunlight Energy is working to sell some of its electricity to the Zimbabwe Electricity Supply Authority, the state-owned company, Mr Mugari said. The coal exploration area, in Gwayi in western Matabeleland, has 4-billion tonnes of resources and China Africa Sunlight Energy is conducting studies to measure how much gas is available, with the results to be known in three months, he said.

"If they discover gas, the way we think they are going to, we want to export the gas overseas to India" in partnership with Discovery Investments, Mr Mugari said. Depending on the outcome of the gas study, the company wants to start a programme piloting methane gas for domestic gas in Hwange, also in Matabeleland, and extend this to Bulawayo, the second-biggest city, if successful.

The projects will create 4,500 jobs, he said.

China Africa Sunlight Energy is looking at the possibility of pumping gas to the port city of Beira in neighbouring Mozambique, using an idle pipeline that the National Oil Company of Zimbabwe once used to bring fuel into the country, Mr Mugari said.

Source: Bloomberg