Delayed payments for coal dampen growth prospects

Luckmore Safuli

The Coal Producers Association fears that delayed payments for delivered coal and the impact of COVID-19 on the value chain may dampen growth prospects for the sector in 2021.

Zimbabwe’s coal industry, which is projected to realise around 3 million tonnes in production in 2021, continues to experience delays in payments for delivered coal, resulting in production disruptions.

Miners are also worried about delays in supply of raw materials as well as depressed demand.

Coal Producers Association Chairperson, Raymond Mutokonyi believes there will not be a significant jump in coal production in 2021 in the wake of these challenges.

“While we have witnessed improvements in payment of arrears, we feel timeous payment for delivered coal remains critical in boosting production. We don’t expect significant jump in coal production in 2021 and we must also point the fact that we beginning to feel the pitch of covid-19 as evidenced by delays in supply of critical raw materials,” he said.

The coal producers’ representative body however applauded measures taken by government to allow mining operations to continue during the current lockdown.

Zambezi Gas and Coal Mine Operations Manager, Engineer Menard Makota believes capacity utilisation will remain subdued but is however optimistic of a strong performance by the sector in 2022.

“The major domestic customer for coal remains the power utility, Zimbabwe Power Company (ZPC) and the fact that Units 7 & 8 will be commissioned most likely early next year means there will be increased demand and improve capacity utilization,” he said.

The envisaged commissioning of the Hwange Thermal Power Station Units 7 and 8 by the end of 2021 is projected to spur demand for coal with most of the miners already guaranteeing consistent supply of the commodity.

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