Hwange resuscitates underground operations

Source: Hwange resuscitates underground operations | The Herald July 3, 2017

Business Reporter
HWANGE Colliery Company Limited is in the process of resuscitating underground operations which will enhance product mix thereby improving margins, managing director Thomas Makore said.

Mr Makore, who was speaking after the company’s annual general meeting on Friday, said the targeted timeline to commence underground production is October.

“Underground is where we have high value coking coal so it will be a good addition to our product mix. It will improve our margins and our volumes, of course,” said Mr Makore.

In the year to December 2016 HCC recorded a 41 percent decrease in revenue to $39, 9 million from $67, 5 million recorded the previous year mainly due to a decrease in sales volumes, but the company expects a positive outturn this year.

The company is expecting to close June at about 230 000 tonnes as production is continually improving since a scheme of arrangement was struck with creditors.

In May, Hwange did 170 000 tonnes rising from 50 000 tonnes in the prior month. “We are optimising and introducing change processes but it’s a whole variety and cocktail of things that range from equipment, people, processes and systems and just becoming better at what we do,” said Mr Makore.

The company is forecasting to increase production by about 50 000 tonnes to about 280 000 tonnes in July and 300 000 tonnes in August. In May, creditors gave Hwange breathing space to retool and return to production after the agreed to the scheme of arrangement which rescheduled the company’s debts.

“The scheme of arrangement means that we have a compromised position with our creditors. That means that we are able to convert our short-term debts into long-term,” according to the managing director.

The scheme of arrangement also saved the company from having its assets auctioned off to settle long standing debts of about $352 million as it had been facing difficulties in meeting its obligations.

Hwange is in the market to raise $15 million for working capital. “Our balance sheet is being restructured and that allows us to access working capital from banks and we are busy negotiating for that working capital from banks. The discussions (with banks) are underway and let’s see what happens in the next 30 days,” he said.

Hwange’s principal activities include exploration, mining processing and marketing of coal and the production of coke and related by-products in the north western part of Zimbabwe.