Government is finding it difficult to raise about US$12 million required to carry out coal-bed methane gas geological surveys in Matabeleland North Province, the Financial Gazette’s Companies & Markets (C&M) can report.
Francis Gudyanga, the permanent secretary in the Ministry of Mines and Mining Development, told (C&M): “We are still looking for about US$12 million to do a bankable study, which will confirm the commercial viability of the gas.”
Zimbabwe discovered coal-bed gas deposits in Lupane’s Lubimbi basin a few years ago but has not been able to determine the extent of the gas wealth.
It is, however, believed that the area is endowed with more than 40 trillion cubic feet of potentially recoverable coal bed methane gas reserves, meaning that Zimbabwe could be the largest strategic energy source in Sub-Saharan Africa.
But the country has not carried out comprehensive exploration to determine the extent of the gas due to lack of funding.
Exploration, which helps the country with geological data, is the most important part of the mining cycle, a process through which commercial concentration of resources are discovered.
It covers activities from preliminary collection of existing geological data to drilling and sample assays.
Foreign investors have been scared by the country’s policies, especially the indigenisation programme which compels foreign owned companies to cede at least 51 percent stakes to blacks in the resources sector.
Government has through its project promoter Lupane Gas, a unit of the wholly-government owned Industrial Development Corporation, tried to raise the required amount for gas exploration but failed. This has hampered all efforts to prove whether the resource is commercially viable or not.
In 2015, government gave a special grant to a company called Discovery Investment Limited to start coal bed methane gas extraction at Mzola and Dandanda communal areas in Lupane.
The company had been seeking an investor to fund its activities but financiers have been dragging their feet after government indicated that it would have a stake in all renewable energy projects in the country.
Another firm, Gazprom, a Russian energy giant, last year expressed interest in the extraction of gas in Matabeleland North Province.
Gazprom’s major business lines are geological exploration, production, transportation, storage, processing and sale of gas and oil, and generation and marketing of heat and electric power.
It holds the world’s largest natural gas reserves and at least 12 percent of the global gas output. The firm has a market value of about US$51 billion.
The coal gas is a form of natural gas extracted from coal beds. In the past decade it has become an important source of energy being predominantly utilised in the United States, Canada, Australia, and other countries.
Methane gas, which is a colourless, odourless gas with a wide distribution in nature, is mostly used in power generation and fertiliser production.
It is the principal component of natural gas, a mixture containing about 75 percent methane, 15 percent ethane, and five percent other hydrocarbons, such as propane and butane.