Wankie production down by half

Coal production at Wankie was down by 50 percent in the first half of this year because of the shortage of maintenance spare parts and major components for the coal mining and processing equipment.

Though the company was granted a US$5.3 million loan in June, which it expected to use to refurbish its equipment, it said this would probably bring production capacity to 80 percent. This was, however, only likely to be realised at the end of September.

According to its report for the six months to June, total coal sales were down by 31 percent to 1.3 million tones with 51 587 tonnes being exported.

Power station coal sales were down by 29 percent while ordinary coal sales plunged 34 percent and coke sales declined by 13 percent.

Coke oven gas production declined from 12.6 million cubic metres to 3 million cubic metres but the company says this did not have a significant impact on its business because gas normally contributed 5 percent of total sales. It was down to 2 percent.

The company says despite the decline in production the National Railways of Zimbabwe, which offers the cheapest mode of transport, was still not able to provide the colliery with adequate wagons. It was therefore mainly relying on road transport.

Though the company recorded a loss of $5.6 billion, down from $5.5 billion the previous year, in inflation adjusted terms, its net profit more than doubled from $261.2 million to $619.8 million. Total sales increased from $3.9 billion to $8.9 billion.

The company had a debt of $4.5 billion but was owed $1.6 billion by Zisco which it said the government had pledged to pay before the end of the year.

The company said it had received two price increases in May and July but graded employees had been awarded a wage increase of 30 percent in July and a further 20 percent in September.

It said while this brought relief to its employees, it would have an adverse impact on its cashflow.

(62 VIEWS)