Coal miner Hwange plans $10m capex

HARARE - Zimbabwe’s largest coal producer, Hwange Colliery Company Limited (HCCL), is finalising plans for a $10 million capital expenditure towards its underground operations, the group’s top executive has said.

The tri-listed coal miner has been battling to access funding for working capital since dollarisation in 2009.

Thomas Makore, HCCL managing director, told journalists yesterday after the company’s annual general meeting that the scheme would be finalised before year end.

“On the coke battery we are waiting to see what the consultant will come up with as funding, then we can disclose what that amount is,” he said.

Makore noted that HCCL is currently producing 450 000 tonnes per month, with 250 000 tonnes coming from the company’s open cast mining and an additional 200 000 tonnes from contract miner Portugal based Mota Engil.

“As we recapitalise our underground, we expect to produce upwards of 50 000 tonnes making our capacity to 500 000 tonnes per month. Going forward, we are going to have excess product on the market which we would want to export to Zambia, Democratic Republic of Congo as well as South Africa,” he said.

Makore added that depending on the pricing HCCL will be looking to export overseas to India and possibly Europe.

This comes as the Zimbabwe Stock Exchange-listed coal miner recently commissioned mining equipment worth $31,2 million towards ramping up production to at least 500 0000 tonnes per month.

HCCL, which has been struggling to ramp up production and pay workers due to declining economic situation, rising debt and ageing equipment, is on a recovery path and management seems to have hit the right code.

In June this year, Mines minister Walter Chidakwa revealed that government will convert the $78 million it is owed by the company into equity in a development aimed at improving liquidity levels at the company.

The coal miner — also listed on London and Johannesburg Stock Exchanges —  is currently operating at 45 percent capacity and is optimistic capacity utilisation will go up on the back of the new equipment.

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