Source: HCCL in payment plans with creditors – NewsDay Zimbabwe May 16, 2016
HWANGE Colliery Company Limited (HCCL) will continue entering into payment plans with creditors that include Treasury Bills and rescheduled plans, Mines and Mining Development minister Walter Chidakwa has said.
BY BUSINESS REPORTER
Chidakwa last week said negotiations will also include the backlog of salaries owed to employees.
“There is an agreement on a business plan and creditors payment schedules to be managed. Accumulating creditor obligations and litigations stand out as a real threat to the going concern of the company. Actions to mitigate litigations are ongoing,” he said.
Chidakwa said the company had reduced its executive managers to nine, while middle and junior managers were reduced to 140 from 209. This resulted in savings of $280 000 a month on the wage bill.
Chidakwa said production at the mine was behind projections because of HCCL configuration, adding that Mota Engil had been meeting production contribution of 100 000 to 150 000 tonnes a month.
Last year, the company owed workers $22 million in unpaid salaries.
Chidakwa said the dragline was now operational and exposing coal at the JKL pit, while mine development was taking place at Chaba, with even more even coal seam.
The minister said from March to May, the company has been conducting mine development and expects to commence production of 150 000t per month from June.
Chidakwa said funding for three main underground operations was being negotiated with various potential financiers.
“Negotiations for termination of the Hwange Coal Gasification Company build-own-operate-transfer agreement are underway. The negotiations also include the takeover of the coke oven battery,” he said.
Chidakwa said the majority of sales were the low value coal to Hwange Power Station.
Zimbabwe Power Company’s Hwange Power Station monthly order was at 150 000t.
Chidakwa said Treasury had agreed to underwrite the rights issue for HCCL, which include sorting out the negative gross margins, restructuring, reducing contractor costs, enhancing efficiency and strengthening corporate governance.