Zimbabwe’s biggest coal miner gets orders for fuel from Europe

coal

Zimbabwe’s biggest coal miner by output will start exporting a variety of the fuel used for steel to Europe next month, making it the first producer from a southern African nation to do so, according to officials.

Makomo Resources Ltd. has received orders for 15,000 metric tons that will be shipped in December, Finance Director Tendai Mungoni said Tuesday. He declined to name the final destination of the coal, saying the information was confidential. The company is in talks with authorities at Mozambique’s port of Beira for the fuel to be shipped from there, he said.

The spot price of metallurgical, or coking, coal on Tuesday topped $300 a ton for the first time since flooding in Australia curbed output from the world’s biggest seaborne exporter five years ago. The price has almost quadrupled since the start of June. Zimbabwe has five coal operating mines but only Makomo is fully operational.

“The inquiries we’ve had are as a result of the recovery in coal prices internationally and to date, we’ve had two firm orders from Europe,” Mungoni said in an interview near Hwange, about 730 kilometers (454 miles) west of the capital, Harare.

Makomo produces 160,000 tons of coking and thermal, or power-plant, coal monthly, Operations Manager Kuda Nyabonda said. It sells this mainly to Zimbabwe Power Co., Zambian Breweries and merchants in the Democratic Republic of Congo.

Makomo is expected to start building a 600-megawatt, $1.2 billion power plant during the first quarter of 2017, Mungoni said. It has concluded a financing agreement with Chinese partners for the project, he said.

Source: Bloomberg