“If Hwange properly coughs, the whole country will be hit by a blackout.”
“Let people not speculate about the capacity of Hwange. We have managed to provide coal to the Zimbabwe Power Company to keep lights on.”
These were the words of Hwange Colliery Company (HCC) board chairman Farai Mutamangira when quizzed about the state of the country’s biggest coal miner.
In an interview this week, Mutamangira said when the new board took over in August last year, it sought to understand the institution before embarking on various reforms. He said what was clear was the need to plug possible leakages and operational inefficiencies that existed at the company.
“We performed a system audit through Ernest and Young who made recommendations. We have since managed to review and smoke out a number of contractors,” Mutamnagira said.
He said as part of the reform exercise, the board had a task to re-equip the mine organically given the limited financial constraints. The company has since floated a tender for mine equipment and 39 firms had made bids for the supply of equipment valued at more than $50 million.
Most of the tenders were for opencast operations and for coal preparation plant.
“Under this arrangement suppliers will provide equipment on a credit basis as we do not want to borrow. There is a good buy-in from suppliers,” he said.
Mutamangira said the company had decided to focus on products able to accrue best margins.
“We have been able to grow revenues since we took over from $90m in 2010 to $107m last year.
“However, because some of the equipment is still old, we will continue to battle with capacity constraints,” he said.
He said talks with the Development Bank of Southern Africa over a $100m loan were ongoing contrary to media reports that talks had stalled.
The company has also approached other regional institution, PTA Bank, for possible funding.
On competition from local and regional companies, the Hwange boss said the company would not rest on its laurels while operators in neighbouring Mozambique had upped their game.
He said the company had begun dealing with the issue by exploring new export markets, particularly in Asia.
The company recently successfully exported its first batch of coking coal to India.
“There is now a robust relationship with National Railways of Zimbabwe to ensure we move our export product. Most people had expected this to be a nightmare logistically,” he said.
“Local competition is nothing to talk about as we can easily saturate the market. We believe we should simply be aggressive in our marketing.”
On the gasification project with Chinese investors, Mutamangira said: “We have officially declared a dispute.
“The deal is not benefiting us as a company, though we have managed to stop the haemmorrhage. We want the deal reviewed.”
He said despite Hwange being a junior partner in the deal, it had huge influence as it had the sole rights to supply coal for the project in order for it to work.
•Efforts to get a comment from HCCL managing director Fred Moyo were fruitless at the time of going to Press