South African-based company LontohCoal has said that it will invest $9bn (R74.43m) in Zimbabwe over the next five years for its coal-to-liquids plant and a coal slurry pipeline at its Lubumbi coal project.
Speaking at the recent Zimbabwe Mining Indaba, CEO Tshepo Kgadima said the company is targeting large-scale capital investment starting from 2013 up to 2018.
Of the $9bn, $7.5bn would be used for the coal-to-liquids plant which will produce about 50 000 barrels per day (bpd) and create 5 000 direct permanent jobs. The group has already concluded a feasibility study.
To date 64 boreholes have been drilled at 250m spacing and the group expects to mine 80 000 tonnes per day of thermal coal to produce the 50 000 bpd.
Kgadima said at the moment Zimbabwe consumes about 13 000bpd of liquid fuels, which is expected to grow to 20 000bpd by 2017-18.
He said once the plant is up, Zimbabwe will realise $2bn in foreign exchange savings as the fuel will substitute diesel and petrol importation.
Kgadima said the project will pay over $9.8bn to government in royalties and taxes over the next 20 years, and procure goods and services including labour over the next 20 years for $41bn
The group also projects to pay out dividends of $3.2bn to Zimbabwean shareholders over 20 years.
*Malcom Sharara, is Fin24’s correspondent in Zimbabwe