via Hwange seeks new coal concessions – DailyNews Live 3 October 2014
HARARE – Hard pressed Hwange Colliery Company Limited (Hwange) is seeking new concessions to boost its coal reserves.
The listed coal miner — whose losses widened by 154 percent to $7,9 million in the half year to June 2014 from $3,1 million incurred in prior comparable period — said the additional concessions are “critical and strategic to the future of the growth plans of the business”.
Its chairperson, Farai Mutamangira, said they targeted to secure the claims in the short term and “focus now is on securing the Western Area concession”.
“The new reserves will augment Hwange’s capacity to supply the expansion of Hwange Power Station, private thermal power stations, coke demand from iron and steel furnaces and chrome smelting plants,” he said in the group’s financials for the half year to June 2014.
Hwange is targeting local and regional markets for its coke and coal products.
Meanwhile, Mutamangira said the group’s investment entities — Zimchem
Refiners, Hwange Coal Gasification Company and Clay products — all performed below budget in the half year under review, resulting in a share of loss of $77 558.
He said sales revenue was depressed during the period under review, dropping to $33 million from $40,4 million recorded in the six months to June 2013.
HCCL sold a total 764 813 tonnes of coal compared to 913 440 tonnes were sold during the same period last year.
“The servicing of the legacy debts continued and this further strained the company’s cash flows and retarded production operations although this trend will change in the second half,” he said.
“Finance costs for the period amounted to $1 million and was comparable to $1,1 million for the same period last year,” Mutamangira said.
“Total assets and investments remained unchanged at $250 million. Capital and reserves decreased from $103,6 million to $67,2 million because of the accumulated loss from last year,” he added.
Mutamangira said coal deliveries to Hwange Power Station in the half year were 394 451 tonnes against 580 818 tonnes in the comparable period.
“Coke sales volume decreased from 25 839 tonnes achieved in the first half of 2013 to 18 363 tonnes for the period under review.
This is attributable to low production performance of the aged coke oven battery that had to be decommissioned after it started uncontrolled cooling.
“To mitigate the impact of the outage of the battery on our turnover, the company entered into a toll coking agreement with South Mining Company,” he said
In an effort to bring HCCL back to profitability, Mutamangira said the company would intensify its cost containment strategies to maintain the margins to yield profitability at the end of the year against the backdrop of declining commodity prices.