adminand marketing of coal.
Essar, which recently acquired a controlling stake in NewZim Steel has expressed interest in Hwange’s coke for its steel operations worldwide.
The company will also need the same product for its Redcliff-based iron and steel plant.
“We are trying to look at an integrated relationship with Essar ranging from enhancing capacity utilisation, marketing of coal and generally revamping of supporting infrastructure such as rail,” Hwange chairman Mr Farai Mutamangira said in an interview last week.
Analysts said if the coal supply negotiations with Essar succeed, it would boost Hwange’s export base as the Indian firm operates a number of steel plants across the world.
Currently, the main export market for Hwange is Zambia and the Democratic Republic of Congo.
In six months to June this year, Hwange registered a marginal increase in revenue but the company remained confident about its future as it expects to benefit from the country’s Medium-Term Plan.
Revenues rose 8 percent to US$49 million from US$45 million in the same period last year but it incurred an unaudited net loss after tax of US$1,5 million compared with a profit of $4,5 million last year.
Total volumes sold fell slightly to 1,16 million tonnes from 1,18 million tonnes. Mr Mutamangira said the company’s capitalisation efforts were ongoing.
“Our recapitalisation efforts are underway and we are confident that a deal will be struck soon,” he said.
Hwange is considered to have world class coal deposits. A full recapitalisation of about US$175 million is however required to boost production.
The coal miner, whose shares trade on the stock exchanges in Zimbabwe, Johannesburg in South and London is talking to Development Bank of Southern Africa for a loan to recapitalise the business.
Online Reporter