South African based company LontohCoal will invest USD 9 billion in Zimbabwe over the next 5 years for its coal to liquids plant and a coal slurry pipeline at its Lubumbi coal project.

Mr Tshepo Kgadima CEO of LontohCoal said that the company is targeting large scale capital investment starting from 2013 up to 2018. Of the USD 9 billion, USD 7.5 billion would be used for the coal to liquids plant which will produce about 50 000 barrels per day and create 5 000 direct permanent jobs. The group has already concluded a feasibility study. To date 64 boreholes have been drilled at 250 meters spacing and the group expects to mine 80 000 tonnes per day of thermal coal to produce the 50 000 barrels per day.

Mr Kgadima said at the moment Zimbabwe consumes about 13 000 barrels per day of liquid fuels which is expected to grow to 20 000bpd by 2017 to 2018. Once the plant is up, Zimbabwe will realise USD 2 billion in foreign exchange savings as the fuel will substitute diesel and petrol importation.

He said that the project will pay over USD 9.8 billion to government in royalties and taxes over the next 20 years and procure goods and services including labor over the next 20 years for USD 41 billion. The group also projects to pay out dividends of USD 3.2 billion to Zimbabwean shareholders over 20 years.

Source - Fin24.com

(www.coalguru.com)