admin
Business Editor
THE Reserve Bank of Zimbabwe (RBZ) has unveiled an $18 million rescue package for the troubled Hwange Colliery Company for the purchase of equipment that is expected to boost production output.Presenting the 2015 monetary policy statement in Harare yesterday, RBZ governor John Mangudya said the funding facility was aimed at boosting output at the parastatal and enhancing coal supply for power generation.
“The Reserve Bank has arranged an $18 million facility to be used by Hwange Colliery for the purchase of equipment that they need for enhancing coal production,” Mangudya said.
“This is necessary to enable Hwange Colliery to be able to supply the requisite coal needed for the generation of electricity by the Zimbabwe Power Company (ZPC) mainly at Hwange Thermal Power Station. Some of the coal would be for export.”
Hwange Colliery has said it is eyeing $1 billion in revenue during the next five years premised on the anticipated increase in demand for industrial and thermal coal.
The expansion of Hwange Thermal Power Station, anticipated growth in industrial capacity and growing demand for coking coal and coke are expected to rejuvenate and help restore the firm to profitability.
The government contracted Sino Hydro to expand Hwange Thermal Power Station with additional two units to add 600 megawatts at the country’s second largest power plant in terms of generation.
The project will take at least three years to complete.
The government is also working on measures to boost industrial capacity, a development that is set to boost coal uptake.
Zimbabwe’s manufacturing sector is operating at below 40 percent capacity utilisation, according to the Confederation of Zimbabwe Industries, a situation that has resulted in suppressed demand for industrial coal.
The much anticipated revival of Zisco will also boost demand for coke in addition to growing potential for the supply of coke into the region, particularly South Africa, the Democratic Republic of Congo and Zambia.
Latest reports indicate Hwange Colliery has increased coal output by more than 60 percent after Mota-Engil, a company contracted by the coal miner, started mining on its allocated claims.
Monthly coal output steadily increased from about 140,000 tonnes to 240,000 tonnes and the company expects to reach 300,000 tonnes this quarter.
Zimbabwe’s coal output has been projected to increase to 7.8 million tonnes this year from the projected 6.45 million tonnes last year.
Online Reporter