Oliver Kazunga, Senior Business Reporter
HWANGE Colliery Company Limited (HCCL) has started a retrenchment exercise to lay off about 1 000 workers, an official said yesterday.
Last year, the Government announced it was looking at the possibility of trimming part of the workforce at HCCL including the rationalisation of the workers to levels that are commensurate with production.
A senior official who preferred not to be named told yesterday that the retrenchment process, which was expected to end early next month, has started.
“The retrenchment process has started. We have invited those interested for voluntary retrenchment and it is difficult to measure in terms of giving figures of those that have volunteered until the process is complete.
“The exercise is open for a month and thus we expect it will be complete by early April,” said the official.
According to our sister paper, The Sunday News, it has been reported that HCCL was now targeting workers above 50 years for compulsory retrenchment after there were no takers for the voluntary exercise.
“It is a sacrifice we are taking to reduce the workforce so that we are able to cut down on costs in order to improve our operational capacity,” said the official.
Once Zimbabwe’s biggest coal producer, the ailing HCCL is saddled with a debt overhang amounting to about $300 million.
In January, the company indicated plans to cool down its various creditors that include its workers and suppliers by negotiating a debt management plan through a scheme of arrangement initiative.
This was in light of a number of debt clearance instruments and creditor payment plans with the Government.
“We are still in the process of finalising the scheme of arrangement, which we also expect would be complete early April,” said the official.
The Zimbabwe Stock Exchange-listed company has been on a loss-making trend despite support from the Government with some of its creditors attaching key properties in a bid to recover their money.
Part of the support from the Government includes securing of new mining concessions and the greenlight to convert $69 million debt into equity.
Once Zimbabwe’s largest coal producer, the firm also intends to come up with a number of debt clearance instruments and creditor payment plans with the Government as part of turnaround strategies.
In 2015, the Government guaranteed two capitalisation transactions that were vendor-financed through the PTA BELAZ facility to the tune of $18,2 million and the Indian Exim Bank’s $13,03 million BEML facility.
The transactions saw HCCL acquiring new mining equipment that included 10 dump trucks, five front end loaders, two wheel dozers, two excavators, two water bowsers and three bull dozers.
However, despite the acquisition, Hwange has not been able to improve on its production levels as output has plummeted to about 30 000 tonnes a month from about 200 000 tonnes.