Hwange Colliery Company limited (HCCL) chairperson Farai Mutamangira said there was urgent need to retool the coal-mining company to enable it to play a more significant role in the recovery of the economy.
Mutamangira was last week elected chairperson of HCCL at a special board meeting at the colliery.
Speaking to journalists after a brief tour of the plant, Mutamangira said they would look at available offshore financing opportunities to recapitalise its operations.
“The company is currently operating at around 60%. We need to increase the capacity by ensuring that we retool and recapitalise,” said Mutamangira.
“Capital is the main issue that has remained elusive. The plan is to try and lay hands on a longterm loan facility. Equity funding is not an option at the moment.”
Hwange requires at least $100 million for recapitalisation.
He said senior management at the colliery had assured the board that funding negotiations with external financiers had reached an advanced stage.
Mutamangira said there was no doubt that most industries relied on Hwange to ensure they functioned effectively.
Mines and Mining Development minister Obert Mpofu said the new board had been given immediate tasks it had to address given the strategic nature of the company in the economy.
According to the company’s financial results for the year ended December 31 2010, earnings surged on rising coal output and expected fresh funding and strong domestic demand to spur production this year.
Turnover was up 47% to $99 million in the same period.
Hwange’s coal production stood at 2,4 million tonnes compared to 1,6 million tonnes in 2009.
“The company is optimistic that its current funding initiatives will materialise during the year and that product demand will firm during the second half of the year,” Hwange said in a statement.
The new board comprises Shingirayi Chibhanguza, Jemister Chininga, Ian Haruperi, Nkosilathi Jiyane, Siphiwe Maphuwa, Johnson Mawere, Lucas Nkomo and Valentine Vera.
Hwange is strategic to the operations of huge firms that include Zesa Holdings and New Zimbabwe Steel.