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Farai Mutamangira

Prosper Ndlovu Business Editor
ZIMBABWE Stock Exchange listed concern, Hwange Colliery Company Limited (HCCL), has sealed a double recapitalisation breakthrough to the tune of $31,2 million that is set to boost production volumes and restore operational normalcy.Board chair Farai Mutamangira disclosed in a notice to shareholders yesterday that the ailing parastatal would soon deliver critical machinery to beef up its operations.

“Hwange Colliery Company Limited wishes to advise its shareholders and stakeholders that it has now successfully closed two capitalisation transactions both of which are vendor financed in the total sum of $31,2 million.

“These are the PTA bank funded $18,2 million BELAZ facility and the India EXIM Bank funded $13,03 million BEML facility,” said Mutamangira.

He said the two transactions will see the company taking delivery of critical equipment before end of this month up to April.

Covered under the BELAZ are 10 x 130 tonne dump trucks, five front-end loaders with 6 cubic metre bucket each and two wheel dozers.

The BEML package will procure two excavators with 11.2 cubic metre bucket each, two 20,000-litre bowsers, three 6 cubic metre bucket front-end loaders, three bull dozers, three wheel dozers, one motorised grader, one tyre handler and three drill rigs.

All the stated machinery is at various stages of shipping.

The board chair said the Mota Engil contract —entered last year to minimise and reduce the capital burden at HCCL — was doing well as it has cushioned the troubled firm from biting operational constraints.

The company engaged the contractor through an open tender process to produce 200,000 tonnes of coal monthly from its open cast operations at Chaba and started producing last August.

“Total production by the contractor to date has now reached 996,000 tonnes, a significant contribution indeed. The contribution of the contractor has enabled HCCL to work on stabilising its own production while bridging the gap between the purchase of new equipment and the commissioning of this equipment in April/May,” Mutamangira added.

He said the overall combined production target was to achieve a minimum of 450,000 tonnes monthly, split between HCCL’s own production and the Mota Engil.

The board chair acknowledged the giant colliery firm was battling a legacy debt in excess of $160 million in unpaid arrears to workers and other creditors, which has accumulated since 2006.

He said the debt includes over $80 million owed in statutory obligations to Zimra and over $80 million owed to trade creditors and staff salaries.

The workers have gone for more than a year without pay amid reports some were suffering food shortages as some blame management for alleged abuse of funds, corruption and cronyism.