Development Bank of South Africa (DBSA) and the Industrial Development Corporation of South Africa (IDC-SA) would soon advance a $180 million loan to local mining giant, Hwange Colliery Company (HCC) it has emerged.
Speaking on the sidelines of the ongoing mining Indaba in Harare, IDC-SA senior project manager for mining and beneficiation Washington Musara said DBSA has since invited the corporation to contribute part of the funds.
DBSA is the lead arranger for the HCC finance project.
“We are going to work together with DBSA and we hope by year-end after the project assessment we should be advancing the funds,” said Musara.
HCC board chairperson Farai Mutamangira said he remained optimistic the company would be able to get money from the institutions it had engaged. “We remain confident that we will get long-term finance,” said Mutamangira.
Musara added IDC-SA offered a wide array of financial instruments, including equity commercial debt, resolving credit finance guarantees and export and import finance to institutions.
“We are ready to fund Zimbabwean mines if they approach us with their business plans for equity investments,” said Musara.
He said projects should be on a large scale and have a potential to act as anchor projects in rural impoverished communities.
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Other conditions include carrying out exploration activities to establish the resource level and IDC-SA would finance the feasibility study in consideration of an equity interest in the project. Musara said the aim was to assist projects so they would not falter within a year.
In August, 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.
“The company is currently operating at around 60%. We need to increase the capacity by ensuring that we retool and recapitalise,” said Mutamangira soon after a special board meeting.
“Capital is the main issue that has remained elusive. The plan is to try and lay hands on a long-term loan facility. Equity funding is not an option at the moment.”
Hwange requires at least $100 million for recapitalisation.
