Coal Mining in Zimbabwe to 2020

Zimbabwe is a relatively small player in the global coal mining landscape. Although the country holds vast coal reserves, particularly in its northwestern and southern regions, coal production measured around 3.6 million tonnes (Mt) in 2013. To promote the industry, the government initiated a policy to explore the untapped coal deposits available in the country.

Scope

The report contains an overview of the Zimbabwean coal mining industry, together with the key growth factors and restraints affecting the industry. It also provides information about reserves, production, consumption, trade, prices, competitive landscape, major active, exploration and development projects and the country's fiscal regime.

Key Highlights

• Hwange Colliery Company Ltd (HCCL), the largest coal mining company in Zimbabwe, is planning to increase its production from 200,000 tonnes (t) per month to 500,000t, after commissioning new equipment and capacity addition.

• Despite 94% of the coal produced in the country being supplied to domestic markets, the country’s mining industry remains crippled due to poor infrastructure and transportation facilities from mining premises to the nation’s coal-fired power plants.

• China is keen to invest in Zimbabwean mineral deposits and in downstream sectors such as power generation. China Africa Sunlight Energy Ltd has committed to invest US$2.1 billion to develop coal mines, as well as to build a 2,100MW plant to help ease electricity shortages.

• Compared with a production of 3.6Mt in 2013, consumption measured 3.3Mt, while exports were limited to neighboring African countries such as Zambia and the Democratic Republic of the Congo.

Reasons to buy

Gain an understanding of the Zimbabwean coal mining industry, the relevant drivers and restraining factors, reserves, historical and forecast production, consumption, trade, global coal prices, competitive landscape and the fiscal regime.

Companies mentioned

Hwange Colliery Company Ltd

Table of Contents

1 Executive Summary 1

2 Coal Mining in Zimbabwe 6

2.1 Country Overview 6

2.2 Mining Industry Overview 6

2.3 Coal Mining in Zimbabwe – Drivers 7

2.4 Coal Mining in Zimbabwe – Restraints 8

2.5 Coal Mining in Zimbabwe – Upcoming Projects 8

3 Coal Mining in Zimbabwe – Reserves, Production, Consumption and Trade 9

3.1 Reserves by Geographic Region 9

3.2 Historical and Forecast Production 10

3.2.1 Total production by grade 11

3.2.2 Total production by province 12

3.3 Coal Prices 13

3.3.1 Thermal coal prices 13

3.3.2 Coking coal price 14

3.4 Total Production by Major Mines 15

3.5 Total Production by Mining Method 15

3.6 Major Exploration and Development Projects 16

3.7 Coal Consumption and Trade 17

3.7.1 Total consumption by type – non-coking 17

3.7.2 Domestic consumption vs exports 18

3.7.3 Export to destination countries 20

3.7.4 Exports by type – steam coal 21

3.8 Demand for Coal in Major Economies 22

4 Competitive Landscape 25

4.1 Hwange Colliery Company Ltd (HCCL), business description 25

5 Fiscal Regime 26

5.1 The Zimbabwean Mining Industry – Governing Bodies 26

5.1.1 Ministry of Mines and Mining Development 26

5.1.2 Chamber of Mines of Zimbabwe (COMZ) 26

5.2 The Zimbabwean Mining Industry – Governing Laws 26

5.2.1 Mines and Minerals Act 26

5.2.2 Base Minerals Export Control Act 27

5.2.3 The Minerals Marketing Corporation Act 27

5.2.4 The Zimbabwe Mining Development Corporation Act 27

5.2.5 Environmental Management Act 27

5.3 The Zimbabwean Mining Industry – Prospecting Licenses 28

5.3.1 Appointment of approved prosecutor as representative holder of prospecting license 28

5.3.2 Duration of prospecting license 28

5.4 The Zimbabwean Mining Industry – Mining Rights and Obligations 28

5.4.1 Rights 28

5.4.2 Obligations 28

5.5 The Zimbabwean Mining Industry – Key Fiscal Terms 29

5.5.1 Royalty 29

5.5.2 Corporate Income Tax 29

5.5.3 Capital Gains Tax 29

5.5.4 Presumptive Tax 29

5.5.5 Withholding Tax 29

5.5.6 Fiscal Incentives 29

5.5.7 Customs and Excise Incentives 30

5.5.8 Loss Carry Forward 30

5.5.9 Value Added Tax 30

6 Appendix 31

6.1 What is this Report About? 31

6.2 Methodology 31

6.3 Secondary Research 31

6.4 Primary Research 31

6.5 Contact GlobalData 32

6.6 About GlobalData 32

6.7 GlobalData’s Services 32

6.8 Disclaimer 34

List of Tables

Table 1: Coal Mining in Zimbabwe – Proximate Analysis of the Sengwa Deposit, 2014 9

Table 2: Coal Mining in Zimbabwe – Coal Production (Million Tonnes) 2000–2020 12

Table 3: Coal Mining in Zimbabwe – Major Active Mines, 2014 15

Table 4: Coal Mining in Zimbabwe – Major Exploration Projects, 2014 16

Table 5: Coal Mining in Zimbabwe – Major Development Projects, 2014 16

Table 6: Coal Mining in Zimbabwe – Total Consumption by Type, Steam Coal and Coking Coal (Million Tonnes), 2000–2020 18

Table 7: Coal Mining in Zimbabwe – Consumption vs Exports (Million Tonnes) 2000–2020 20

Table 8: Coal Mining in Zimbabwe – Export to Region and Destination Countries (Million Tonnes), 2013 21

Table 9: Coal Mining in Zimbabwe – Steam Coal Exports (Million Tonnes), 2000–2020 22

Table 10: Demand for Coal in Major Economies (Million Tonnes), 2013 24

Table 11: The Mining Industry in Zimbabwe – Royalty Rates (%), 2014 29

List of Figures

Figure 1: Location of Coal Fields in Zimbabwe 10

Figure 2: Coal Mining in Zimbabwe – Coal Production (Million Tonnes), 2000–2020 11

Figure 3: Global Thermal Coal Price (US$/tonne), 2006–2014 13

Figure 4: Global Coking Coal Price (US$/tonne), 2006–2013 14

Figure 5: Coal Mining in Zimbabwe – Total Consumption by Type, Steam Coal and Coking Coal (Million Tonnes), 2000–2020 17

Figure 6: Coal Mining in Zimbabwe – Domestic Consumption vs Exports (Million Tonnes), 2000–2020 19

Figure 7: Coal Mining in Zimbabwe – Exports to Destination Countries (%), 2013 20

Figure 8: Coal Mining in Zimbabwe – Exports by Type, Steam Coal (Million Tonnes), 2000–2020 21

Figure 9: Chinese Coal Imports (Tonnes), 2007–2013 23

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