Chilota aims at underground mining

CHILOTA Colliery is geared to venture into underground mining in the next four to six months after securing a potential investor, managing director, Mr Hebert Makwala, said.

The young mine suspended operations sometime last year owing to various

challenges stemming from subdued production, working capital constraints and contractual disagreements.

In an interview Mr Makwala said they have since secured an investor who was keen on venturing into underground mining by mid-year.

“We have found a potential investor who is keen on assisting Chilota in opening an underground mine. The reason for an underground mine is because the coal in the area is deep-seated.

We are in discussions with the principals of Chilota and the investor and once we agree we will hit the ground running, it will be in the public domain soon,” said Mr Makwala.

He could however not disclose the said investor and how much was being negotiated but said start-up capital needed to kick-start the project was between $8-10 million with initial production set at 40 000 tonnes per month with a forecast of increasing volumes to 500 000t.

“At the moment a figure of between $8 and $10 million would suffice for us to start mining. That’s the initial figure but once we start we can develop the mine and increase production,” said Mr Makwala.

“In terms of volumes we really want to start at 40 000 tonnes per month and then incresase to 500 000 because the potential investor is also interested in exporting overseas.”

Mr Makwala said the mining at Chilota was stopped because the coal was deepseated and as such production costs were too high hence the contractor who was mining was not happy with the low profit margins.

“The contractor felt that it was not viable for him to continue with low margins at Chilota and we understood his position. This is why we now want to move from open cast to shaft mining,” he said.

Mr Makwala, however, said the coal from underground mining will not be used at Hwange

Power Station due to its low ash content. It is hoped the resumption of operations is expected to breathe new life into the surrounding communities in terms of job creation.