Hwange seeks $7,5m loan

Source: Hwange seeks $7,5m loan | The Herald May 2, 2016

Golden Sibanda Senior Business Reporter
HWANGE Colliery Company has requested Zimbabwe Power Company to back its application for a $7,5 million loan from Agribank meant to double coal production to about 300 000 tonnes.

Chief executive Thomas Makore said the company requires significant working capital to increase production from the 150 000 tonnes to 300 000 per month to meet demand from ZPC.

“What we discussed with ZPC is that we need them to pay us on time so that we are always able to procure working capital inputs, that is one.

“The second part is that we also worked with them on getting a loan facility from Agribank,” he said.

The Hwange Colliery CEO made the remarks in an interview with The Herald Business at the 57th edition of the Zimbabwe International Trade Fair, which ended in Bulawayo on Saturday last week.

Mr Makore said since mining is capital intensive, his company had asked the power utility to support it in terms of securing money for working capital. As such, they are going to do a prepayment for coal and we will use that to pay for expenses, fuel, lubricants and all other inputs that go into production,” he added.

The Hwange CEO said if the plan works out well the country’s oldest coal mining company would be able to boost output to meet ZPC’s growing demand, especially ahead of the winter period.

“The facility we are looking at right now is about $7,5 million. Agribank is preparing a facility between us and ZPC. We are hoping that it will be available anytime now, hopefully by the end of this week,” Mr Makore said.

Mr Makore said once the funding is secured, the company is hopeful that it would be able to raise production in the next month.

Commenting on challenges around recently acquired equipment, especially excavators purchased from India, Mr Makore said they had rigorous discussions with the supplier to resolve the problems of the equipment, which regularly broke down.

“They sent spare parts to fix technical faults at their own cost and they also extended warranty on those machines. Initially it was 2 000 hours but they have extended it to 3 000 hours or by a further six months, whichever is earlier,” he said.

Further, BML of India, which supplied the equipment under a $32 million recapitalisation programme, have sent a technical support team, which is monitoring the situation.

“So once we have this working capital we will be able to test the equipment and check whether it is able to perform to specification.”

He said problems came after the company started buying equipment from other suppliers across the world, including India and China as opposed to their traditional suppliers Caterpillar and Hitachi, who have more experience.

COMMENTS

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    bexilford 6 years ago

    The equipment they bought is not fit for purpose and should be returned and $32million refunded. When they borrowed the $32m they said it would increase capacity from 300000 to 500000 tonnes per month. Now they are producing only 70000 tones. The management need a culling and pay reduced until they perform. When Hwange colliery was run by Anglo American it produced at the rate of 450 000 tons per month with less managers and was profitable and a tax payer . They bought the proper equipment and paid their staff on time. It is high time we had suitable managers employed or else be privatised. We cannot keep on expecting workers to work without pay and managers looting.