Zimbabwe: Hwange Doubles Coal Output

Zimbabwe: Hwange Doubles Coal Output

HWANGE Colliery Company Ltd (HCCL) has doubled daily coal production at its opencast and underground mines, and is now looking at renewing exports since the arrival of new mining equipment in the last quarter.

Coal output at the opencast mine has risen by 100 percent to 10 000 tonnes per day while that from the underground mine has also doubled from an average 800 tonnes daily to 1 600 tonnes.

This brings good news to tobacco farmers and other coal users who have often lamented inadequate supply of the key resource.

Fundamentally, wholesale company production would have increased by about 100 percent by year-end, said managing director, Dr Godfrey Dzinomwa.

Last year, HCCL sold a total of 831 164 tonnes of coal.

“Further improvement is expected, as the operating personnel become more conversant with the machinery,” the MD noted last Friday.

“HCCL is currently replenishing coal and coke stocks in all sectors of the economy, and is on course to satisfy national demand before the end of this year.”

Dr Dzinomwa said the company would raise output to 425 000 tonnes per month between now and December, beating domestic demand currently at 300 000 tonnes monthly.

Key to the attainment of these targets was the importation of 10 dump trucks of the Terex model from Norinco of China, as well as two Atlas excavators and another Terex water bowser from the same firm.

Hwange has also taken delivery of two drilling rigs from Sweden that will speed up the process of drilling and blasting, necessary in removing overburden to expose coal for extraction, and two shuttle cars from Joy Mining, South Africa.

However, a coal fines recovery plant being manufactured in SA has not been delivered yet. The plant will be used to convert approximately five million tonnes of a fines dump into valuable coking coal.

The entire re-equipment project was being done at a cost of US$10 million with some down payments already having been made.

Local coal demand has continued to outpace supply in recent years, as the sole coal producer’s production levels had been hindered by inadequate foreign currency supplies key in the purchase of spare parts and meeting of other daily operational overheads.

Although demand for HCCL’s products remains firm, the company’s biggest challenge now was to cut its high gearing ratio ranging around 114 percent, according to June 2006 figures. Total company debt stood at $1,7 million.

Clearly, analysts say Hwange is in need of urgent recapitalisation, as it appears grossly under-capitalised.

“The challenge for Hwange will be undertaking a capitalisation programme, which delivers the much-needed foreign exchange so that the group can adequately undertake a significant capital expenditure project,” commented Harare analyst, Mr Dzika Danha.

Currently, expansion work is on-going at the 3 Main underground mine.

The mine, with a lifespan of 25 years, has capacity to produce some 150 000 tonnes of coal a month.

Copyright © 2006 The Herald. All rights reserved.

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