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Herald Reporter
Hwange Colliery Company Limited (HCCL) has secured a US$18 million loan facility from PTA Bank to recapitalise operations in a development expected to reinvigorate the coal mining firm. The US$18 million fund is a timely boost for the company that is operating below capacity and is producing 200 000 tonnes of coal annually against a target of 450 000 tonnes.
In an interview on Friday, HCCL board chairman Mr Farai Mutamangira, said the US$18 million facility would be used to fund the operations.
“We have secured a US$18, 3 million loan from PTA Bank.
“The money will be used to purchase mining equipment from a Belarusian company, Bulaz.
“We have been notified that the loan has been approved, so this is a step in the right direction for the company,” said Mr Mutamangira.
Mr Mutamangira was speaking in a telephone interview from Europe where he was concluding the negotiations.
He said the equipment was expected to arrive in the country next month.
“We are in the process of finalising the documentation with the equipment supplier and we expected the equipment to arrive in June,” he said.
HCCL company secretary Mr Tembelani Kole Ncube also confirmed the deal.
The US$18 million loan is part of measures being undertaken by the company to turn around its fortunes.
Last week, HCCL proposed to retrench about half of its more than 3200 workers but the move was blocked by Mines and Mining Development Minister Walter Chidhakwa.
Minister Chidhakwa advised HCCL to find other means of resuscitating the company rather than retrenching workers.
“Looking at this retrenchment, where you say let’s reduce the number of workers and reduce cost of labour, will you (HCCL) get the results you are looking for?
“There’s another way of increasing production. Let’s sell more coal and let’s look after our costs. Therefore retrenchment for now is off the table,” he said.
Minister Chidhakwa said Government was prepared to offer more coal claims to the company to increase its lifespan.
As part of plans to make it profitable, the company has unveiled its plans to unbundle six strategic business units which are Hwange Colliery Holdings, Hwange Coal Mining, Hwange Plant and Equipment, Hwange Coal Processing and Cokeworks, Hwange Hospital and Hwange Properties and Estates.
The company also plans to realign senior management and appoint a chief operating officer.
HCCL is the country’s largest coal producer while its main entity, Hwange Power Station, is the second largest contributor to the national grid.
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