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Prosper Ndlovu, Business Editor
THE viability of Hwange Colliery Company Limited (HCCL) hangs in the balance in the face of mounting operational constraints that have resulted in a drastic slump in output as it struggles to meet daily targets.

Inside sources said the company was struggling to secure explosives and fuel for its equipment while it battles ageing machinery and a string of litigations from different creditors.

This has crippled the efficient supply of coal for thermal power generation.

The Zimbabwe Power Company (ZPC) admitted this week that its coal stocks were fast dwindling due to inadequate supplies.

“Things aren’t good at Hwange Colliery. The company is struggling to sustain daily production. We’ve just been given $120,000 for fuel by ZPC to ensure that we don’t stop operations,” said a reliable source from the company who requested anonymity for fear of internal reprisal.

The company admitted technical insolvency in its annual financial report for the year ended December 31, 2015 with figures indicating it was approaching a point of certain bankruptcy.

Saddled with liabilities of about $300 million with no matching debtors, HCCL has had the bulk of its properties attached by creditors, robbing it of critical resources it needs to remain afloat.

Major production equipment and machinery has been attached while some has been auctioned in Harare and Bulawayo offices as well as its plant equipment.

There are fears the stripping and selling of company assets might continue and would intensify as more creditors obtain court orders against the company.

While HCCL managing director Thomas Makore could not be reached for comment, the official said it was true that HCCL was struggling to supply power stations, which has seen supply stocks going down in the past few weeks.

“We’re operating at critical levels because the Colliery is failing to pay its creditors on time and at times we struggle to secure raw materials such as explosives,” said the source.

“We also have a problem with ageing equipment.

‘‘The machinery that was imported last year has defects and it has not helped in any way.

‘‘Management seems to be failing to rectify this issue with its suppliers.”

Further, the source said, workers were devastated by the situation in the company as some have lost confidence in management capacity to restore normalcy in the once vibrant firm.

In the absence of HCCL, economic experts fear the country could be headed for a coal supply crisis.

Left alone, experts say smaller producers like Makomo Resources and Chilota do not have the capacity to meet local demand as they do not have adequate equipment for underground mining, which requires more capital investment.

Disgruntled workers in January this year approached the High Court seeking judicial management, which they say would stop litigations and save the firm from going into liquidation.

Taking the company into judicial management is a holistic approach which protects the interests of all stakeholders while allowing the firm to be repositioned for recovery.

However, the matter is still pending at the courts.

Workers have also alleged gross mismanagement of the company and inherent corruption in procurement, which they blame for the demise of HCCL.

Management has denied the accusations.

Affirmative Action Group (AAG) economist Reginald Shoko said management should quickly embrace judicial management to protect the company from imminent collapse.

“Litigations are mounting. We’ve been advocating for judicial management but it’s taking time to have this concluded in court and this might render the company useless,” said Shoko.

“We hope the new board will address this issue urgently.

‘‘Our support to them is on condition that they deal with corruption and ensure those implicated are brought to book.

“HCCL is a strategic entity and we shouldn’t play politics with it.

‘‘There are investors who can work with the Colliery but they can’t come when things are like this.”

See Editorial Comment on Page 4