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Oliver Kazunga Senior Business Reporter
HWANGE Colliery Company Limited (HCCL) plans to invest in a coal bed methane gas project following its recent acquisition of new coal concessions from the government.

The new concessions — Western Areas Coalfields and Lubimbi — are expected to improve the colliery’s life span by up to 50 years.

HCCL board chairman Farai Mutamangira said the giant parastatal was working on diversifying its operations in line with the government’s economic blue-print, Zim-Asset.

“We now have a very huge base of coal reserves; we’ve recently been given the concessions in the western areas and Lubimbi and we’re going to be looking at those areas as a board to see what we can do in terms of really deploying a number of products that we can push into the market,” said Mutamangira.

“We’re going to be looking at coal bed methane gas because we think we can produce gas that we can sell on the domestic market from coal.

“We just need to look at the commercial viability of the volumes, quality of the gas and the level of the investment that we’ll need to make it commercially usable in an industrial or domestic application.”

In line with Zim-Asset expectations, HCCL has unveiled plans to set up a fertiliser plant to promote beneficiation.

“We’re also excited by the possibility of doing a lot of beneficiation.

“We’re looking at fertiliser production and we’ll see how we can do it despite the technology for the plant being expensive.

“We want to see how we can push the boundaries of limits; we’re an agro-based nation thus we can’t afford to ignore the growing technological competences over time with respect to some of the beneficiation initiatives,” said Mutamangira.

He said it was HCCL’s intention to aggressively create markets for its coal production.

Against this background, the colliery will focus on engaging the Zimbabwe Power Company to see how it is progressing with the stage three expansion project at Hwange Thermal Power Station so that HCCL matches its capitalisation with coal demand by the thermal power plant.

HCCL, Mutamangira said, has had a long history of struggling with performance due to the colliery’s legacy debt and issues that were now being addressed from a balance sheet perspective.

The coal producer has a cumulative debt of about $160 million.

Following the successful closure of two capitalisation transactions that were vendor financed through the PTA BELAZ facility to the tune of $18.2 million and the India Exim Bank’s $13.03 million BEML facility, HCCL in June commissioned new mining equipment expected to improve the colliery’s output to 450,000 tonnes per month by September.

All of HCCL’s new equipment including that which was recently reported in some sections of the media as faulty because of hydraulic oil leaks, has been successfully commissioned and deployed.

The colliery and the mining equipment supplier BEML has denied the allegations that the machinery was second hand due to the oil leaks as this was a normal experience on equipment of such magnitude.

HCCL has said the reports had been perpetrated by its detractors whose ideas were bent on scuttling the company’s recapitalisation efforts.

The machinery was also procured under warranty from the supplier and thus a team of engineers from BEML was dispatched to come and address the oil leaks.

“HCCL on its own mining capacity, we want a minimum of at least 250,000 tonnes per month and if we add the contractor’s capacity we must be able to achieve at least between 400,000 and 450,000 tonnes per month . . . that should give us decent turnovers and it should enable us to meet our obligations and begin to come out of our hole,” he said.