By Byron Mutingwende
A raft of turnaround measures being implemented by Hwange Colliery Company Limited are bearing positive fruits, Board Chairman Winston Chitando has revealed.
Chitando made the remarks at a media and stakeholders cocktail in Harare on 19 October 2017.
“On behalf of the board, I am more gratified to announce that the company is firmly on track in its turnaround journey as a raft of measures that have been put in place to turnaround the organisation continue to bear positive outcomes. First and foremost, may I express my sincere gratitude to the Government of Zimbabwe through the Ministry of Mines and Mining Development for the enormous support they have rendered the company in its turnaround plans,” Chitando said.
He revealed that legacy debts were threatening to choke Hwange Colliery Company and hailed the support by the government in the Scheme of Arrangement modalities, which aim to oil the economic wheels of the nation.
Chitando said the Gijima 100 Day Rapid Results project whose main focus is on production and productivity improvement implemented by the company also brought with it improved performance from the second quarter of this year.
“The Gijima Phase 2 project is also now in motion with the establishment of six teams focusing on safety, quality, processing, coal movement, exports and equipment availability. To this effect production volumes, which have risen to around 300 000 tonnes in the mid year are expected to top 400 000 tonnes by year-end when production at the 3 Main Underground Mine resumes.
“The company also entered into two 25 year coal supply agreements, one with Zimbabwe Power Company and the other with Per Lusulu power, an independent power producer in Matabeleland North. These off-takes form an anchor to the company’s sustained turnaround strategies and therefore we are confident Hwange Colliery’s future looks bright.”
He added that the company’s survival strategy was to focus on lowest production cost techniques and grow the business back to profitability through high volume production above break-even point, cost reduction and increased sales volumes.
This would be coupled with balancing the mix of products so that it includes low and high margin products such as thermal and coking coal respectively.
Thomas Makore, the Hwange Colliery Limited Managing Director said the company was working hard to service its debt estimated to be over $300 million in the next 10 years but hinted that with the right attitude, it could be cleared much earlier through a boost in production and sales of coal.