Zimbabwe battles to lure investors for its gas discoveries - CNBC Africa

Zimbabwe battles to lure investors for its gas discoveries


by Trust Matsilele 0

Zimbabwe battles to lure investors for its gas deposits requiring huge capital investments. PHOTO: Kinley exploration

The recent discoveries in Matabeleland province, one of the country’s under developed regions could see the resuscitation of the formal employment in a country reported to have unemployment levels well beyond 80 per cent.

An exploration by the Industrial Development Corporation (IDC) established extensive deposits of coal-bed methane gas in the Hwange-Lupane basins estimated to be over 23 billion cubic feet per square mile or 27 trillion cubic feet.

Huge investment in coal and gas production and distribution could stimulate potential economic recovery, creating employment and other business opportunities.

The country could become a major supplier of cheaper coal products, especially gas in the SADC region which heavily relies on electricity and in desperate need of alternative sources of energy.

(WATCH VIDEO: Energy identified as investment opportunities in Zimbabwe)

An expert who commented on condition of anonymity stated that, “Zimbabwe’s gas deposits were second to Qatar, with the potential to last over five thousand years.”

“The gas in Lupane was discovered in 1939 by the German and British explorers explaining why the country has been an international spotlight over the years,” the source confirmed.

The coal gas is a form of natural gas extracted from coal beds. In recent decades it has become an important source of energy being predominantly utilised in the United States, Canada, Australia, and other countries.

With increasing pressure among global economies to make a transition into green technology, the gas deposits could transform the economy as Zimbabwe will likely become one of the leading suppliers.

Zimbabwe’s economy has been on a free fall since 2002 when it was slapped with restrictive measures by the United States and other Western European nations.

The Harare administration was among others accused of gross human rights violations, corruption and electoral fraud in the past elections since 2000.

(WATCH VIDEO: Zimbabwe's road to democracy- Part 2)

However, factoring the political bigwigs’ interests in controlling economic levers in the country, the western region could soon become another hotspot attracting mass murders like the diamonds fields in Chiadzwa.

In 2008, when the country discovered diamond deposits in the eastern part of Chiadzwa, human rights groups reported of systematic murders in the region as various interest groups fought to control the mineral deposits.

The country’s diamonds deposits later dubbed “blood diamonds” saw the country failing to benefit from the minerals as they were confined and benefited a few connected political elites.

Independent mechanical engineer, Munjodzi Mutandiri told CNBCafrica.com that the country had the required technical expertise but lacked capital to kick-start such projects.

“We have methane beds in Lupane, Hwange and Beitbridge. Zimbabweans are overseeing such projects world over. The challenge we face as a country is capital and this is worsened by uncertainty in our investment laws especially clarity on our indigenisation laws,” said Mutandiri.

“The challenge which is then confronting the country is that if these fears are not allayed the country will fail to attract the much needed foreign direct investments,” he added.

Political analyst, Gideon Chitanga, pointed out that if the country does not reform its laws and institutions, particularly issues of human rights which have alienated it from major western investors, a great opportunity will be wasted.

“Government should strive to create a conducive environment for investment, reform the controversial indigenisation law and guarantee investors that they will not lose their investments to the state and or corrupt political heavies.”