Colliery contractor suspends operations

The investment is part of the joint venture between HCCL and Zhongjin Investments and is designed to unlock the underground potential of Zimbabwe’s oldest colliery operation.

Fairness Moyana in Hwange

HWANGE Colliery Company’s contractor, Mota Engil, has reportedly suspended operations at the JFK mine following a row over payment.

The Portuguese-owned company is understood to have halted mining operations last week citing delays in payments, which is now affecting production. Mota Engil is reportedly owed over $4 million.

Inside sources said the contractor was unhappy over delays in payment and was citing high production costs.

“The Colliery has been delaying in settling its payment obligations to the contractor who felt over burdened with high cost of producing coal. Mota Engil has a contractual obligation to produce 100 000 tons of thermal coal per month but have only been managing 60 000 tons,” said a close source.

Acting managing director, Dr Charles Zinyemba, could neither deny nor confirm the development but referred questions to spokesperson, Ms Rugare Dhobbie, who kept saying she was in a meeting on Wednesday. Yesterday she was not picking phone calls and had also not responded to messages sent on her mobile phone.

Hwange Colliery, which continues to battle operational constraints, has been producing about 50 000 tons, bringing the total thermal coal produced to 110 000 tons per month. As part of measures to boost output following a poor performance owing to aged equipment, HCCL contracted the Portuguese firm to augment its production in 2014.

The bulk of the tonnage is channeled towards power generation at Zimbabwe Power Company (ZPC) thermal power stations. However, last week the power utility complained that coal producers, including Hwange Colliery, were failing to meet their delivery targets. The mining companies on one hand have complained about the high costs of producing coal.

Unavailability of fuel and foreign currency to procure spare parts for critical equipment have also exacerbated the challenges in producing and satisfying demand.

The companies under the Coal Producers Association recently pledged to increase their production in anticipation of meeting demand once the unit 7 and 8 expansion project is complete.