Source: Hwange Colliery to secure funding for underground operations – Sunday News Oct 9, 2016
Roberta Katunga
HWANGE Colliery Company is in the process of securing funding to restart its underground operations.
Engineer Thomas Makore said the coal mining company has already identified various financial institutions that have the potential to fund operations.
Mr Makore said HCCL was looking to restart the underground operations early next year, which were suspended after an underground mining machine broke down in August 2015.
“The resumption of the underground mining operations will add high value coal and coke to the company’s product mix. We have already started the process of seeking funding from various banks,” he said.
According to reports, the company needs about $6,3 million to fix the underground mining machine that broke down and to buy more equipment. Speaking on the new faces in management, Eng Makore said four external candidates joined the company as part of the turnaround process.
“We are in a turnaround process and because we had to reduce management positions and combine some posts as well as reduce managers’ salaries by 50 percent; we engaged individuals that have experience in mining and turnaround strategies,” he said.
Mr Makore said it was important for a company that is facing challenges to have managers with character and depth to work together with the team and drive the turnaround process.
“We need the support of the board and shareholders in turning around the fortunes of the company as we believe that if we all work together things will improve,” he said.
Hwange Colliery is producing 70 000 tonnes a month against a target of 200 000 tonnes. According to Eng Makore, the main challenge for the mine has been working capital.
The company has become mostly reliant on contract mining under an arrangement with Portuguese company Mota-Engil after the breakdown of Colliery’s own equipment. The mine has a five-year contract with Mota Engil which began at the end of 2013.
“We need working capital to repair our machines and reach our monthly target of production and once the creditors’ scheme of arrangement has been implemented, we will be able to access funding from banks,” said Eng Makore.
Claims are that the mine is planning on ceding its open cast mining operations to Mota Engil once underground operations resume.
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