adminOliver Kazunga Senior Business Reporter
ARCELORMITTAL South Africa has started importing coking coal from Hwange Colliery Company Limited (HCCL) for quality testing as the foreign firm intends to import 30,000 tonnes of the raw material per month.
ArcelorMittal South Africa is a steel manufacturing company.
HCCL managing director Thomas Makore told Business Chronicle that quality testing of coking coal from Hwange was expected to be completed next month.
“They’re still testing the quality of our coking coal. We hope the testing process will be completed by the end of July after which a deal will be entered into if they’re satisfied with the quality of the coking coal.
“The deal will see us supplying them with 30,000 tonnes of coking coal per month,” he said.
Coking coal is one of the major raw materials in steel production.
HCCL and ArcelorMittal, whose operations comprise four major facilities that produce both flat and long steel products, started coking coal supply deal negotiations early this year.
It is believed that if the deal sails through, it would go a long way in boosting the coal miner’s regional markets as HCCL was seeking to insulate itself from the subdued demand on the domestic market and fall in global prices.
Following the acquisition of new mining equipment valued at $31,2 million, the coal miner is expecting to increase production by more than 50 percent in the third quarter of the year on the back of improved efficiency from new machinery.
The equipment was acquired from Belarus and India through a $31,2 million vendor financing initiative.
The company’s target is to increase production from 300,000 to 450,000 tonnes a month.
Production levels had dropped to below 150,000 tonnes a month and only increased following the contracting of Portuguese firm, Mota Engil to extract coal at the company’s open cast mine two years ago.
The government has said it would soon issue new coal concessions to the company.
Bongani Ndlovu
Online Reporter