Kudzanai Gerede Business Correspondent
Zimbabwe will soon start the production of diesel, leveraging on massive coal bed methane the country is endowed with in line with the ethos of mineral value addition, Post Business has learnt.
Coal can produce fuels like diesel and paraffin through a scientific process called liquefaction.
Already Government has signed two memoranda of understanding in this regard with entities that will undertake the project expected to kick start within the next 18 months.
The country is losing a great deal of foreign currency importing fuel at a time foreign currency is scarce and the latest development is expected to go a long way in restricting the import bill.
Speaking in Harare last week at the third edition of the MINEX Conference, a platform which brings together agriculture and mining stakeholders, Mines and Mineral Development Minister, Winston Chitando said the country should move towards maximising returns of its natural resources, with diesel production soon to commence as a by-product of massive coal reserves.
“We need to ensure that we go beyond just producing minerals and selling them in their raw form.
“We will be moving towards being a net exporter of diesel from the coal bed methane, as we will have managed to curb importation of this commodity by producing it here,” said Chitando.
Earlier this year Minister Chitando stated that Government had secured a $ 700 million deal to develop a coal bed methane site and resuscitate the Feruka fuel plant that will kick-start the production of diesel.
Fuel remains a massive import product and the country has been coming up with various initiatives to minimise its cost by blending it with locally produced jatropha.
Still on value addition, the minister also stated that the soon to be launched lithium development policy will further see the country produce lithium carbonate which goes towards battery making as a value addition strategy. Currently the country ends at producing lithium concentrate.
Government intends to expand the extractives sector contribution to Gross Domestic Product to $12 billion in the next 5 years from current levels of $ 2.6 billion it contributed last year.
To achieve this, the sector will aim at value adding natural resources, undergo massive exploration of minerals across the country and improve output from gold and diamond sub sectors.
The consolidation of the diamond sector by Government is already yielding positive results with 1.8 million carats diamonds already extracted last year while the latest conglomerate plant already completed by ZCDC is expected to produce over three million carats annually.
Zimbabwe Miners Federation President Henrietta Rushwaya stressed the need for mainstreaming artisanal miners into the formal economy.
‘Artisanal miners’ contribution last year was 53 percent of total gold out and results of the first half reflect a 65 per cent rise,” she said.
Analysts have applauded Government strategy to value add the country’s natural resources and called on speedy implementation of the proposed goals riding on current positive sentiment towards the country as an investment bed.