HWANGE Colliery Company Limited (HCCL) expects monthly output to double to 300 000 tonnes of coal on the back of the delivery of new equipment.
NDAMU SANDU
HCCL’s current monthly output is 150 000 tonnes.
HCCL managing director Stenjwa Thomas Makore said yesterday the company has now finalised the acquisition of loading and drilling equipment worth $15 million from BEML of India. The deal would be financed through a loan from Export and Import Bank and supported by Zimbabwean government.
Disbursement of the facility is expected mid-July. Makore said the company was also working on procuring additional mining equipment from BELAZ of Belarus worth $18,3 million.
The equipment will be on site by August or September at the latest, Makore said.
“On commissioning of the above pieces . . . the company will be able to produce 300 000 tonnes of coal per month. With such production and estimated monthly revenue of at least $12 million, the company will become profitable and its going concern position will be significantly enhanced,” Makore said.
Makore said the company was also working on restructuring the balance sheet as the current liabilities were exceeding current assets and also affected by interest burden on legacy debts. “In the past 24 months, we have paid $35 million to service legacy debts,” he said.
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“Because of the legacy debts financial institutions view HCCL as high risk due to the high current liabilities and therefore, are not keen to extend favourable lines of credit to the company.”
Makore said the operation required “steady working capital for staff remuneration, electricity, fuel, oils and lubricants, explosives, equipment spares and provision for equipment replacement”.
He said the company had been in salary default and some creditors have taken it to court. HCCL owes employees $19 million in salaries and other equipment suppliers that have taken the company to court. The suppliers were owed 13 million.
Makore said the company was mapping a clear roadmap that should make it profitable and create shareholder value.
