Hwange Colliery seeks $15 million capital boost

Hwange Colliery Company says its production for May rose by over 200 percent to 170 000 tonnes, from 52 000 tonnes in April after shareholders approved a debt repayment scheme which saved the miner from going under.

Managing director Thomas Makore said month on month production from January to March was between 30 000 tonnes and 40 000 tonnes but the company expects to exceed 200 000 tonnes in June.

Annually, he said the company has targeted to produce four million tonnes.

In May, HCC creditors approved a Scheme of Arrangement that will stagger debt repayments, saving the company from going under judicial management.

The deal also stopped its equipment being auctioned off for failing to honor obligations and allow the colliery to borrow money from banks for working capital.

Makore said Hwange’s total debts stood at $352 million, which it will convert to long-term liabilities under the Scheme of Arrangement.

The miner also requires $15 million working capital in the short-term to boost production.

“Our capital requirements are big, so in terms of developing our new concessions we will require external funding. We will be approaching a number of institutions, local and international so that we raise that money,” Makore told journalists at the 45th memorial to commemorate the 1972 Kamandama mine disaster that killed 427 miners.

“For short-term working capital, we need $15 million and to develop each of the (three) concessions we need approximately $150 million,” said Makore.

In 2015, government granted HCC new coal concessions in Western Area, Lubimbi East and West with an estimated resource of 750 million tonnes of mainly coking coal and thermal coal.

In April, the miner signed two off-take deals with the Zimbabwe Power Company and independent power producer Lusulu Power for a combined five million tonnes annually.

Makore added that the company has been paying monthly salaries since December last year.- The Source

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