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Happiness Zengeni and Martin Kadzere
GOVERNMENT has granted Hwange Colliery Company new coal concessions in western areas, Lubimbi East and West. A competent persons report by an independent consultant, SRK Consulting, estimated a resource of 750 million tonnes in western areas only split evenly between coking coal and thermal coal. The resources are expected to increase the lifespan of the coal mining firm to above 50 years.
Well-placed sources told The Herald Business that the reserves can be extracted either through open cast or underground mining methods. The coal deposits consist of thermal and coking coal.
“Hwange Colliery Company is expected to commence the exploration and mine development of these concessions shortly. It will soon be going into the market to look for suitable partners and financiers to develop the three mining concessions,” said the sources.
The company has been pursuing the western areas coal fields’ concession for the past decade as it has lucrative coal deposits in the northwestern parts of Zimbabwe.
At the company’s recent annual general meeting, managing director Thomas Makore said the company, whose shares trade on the Zimbabwe, London and Johannesburg stock exchanges, may consider a joint venture to develop new mines at the new coal fields.
“Plans to commence exploration and mine development are being done vigorously,” Mr Makore told shareholders during the company’s annual general meeting yesterday.
“There is a possibility that the company will have to go to tender for technical and financial joint venture partner for the multi-million-dollar project.”
The awarding of these concessions by Government is in line with the company’s growth strategies in terms of diversification and demonstrates recognition of the recapitalisation and turnaround initiatives. This is a major boost to Hwange Colliery’s balance sheet and creditworthiness and will ensure a positive growth in the fortunes of the company.
Mines and Mining Development Minister Walter Chidhakwa had indicated at the occasion to commission the company’s new equipment last month that the Government would release more concessions to HCCL as way of supporting the company’s ongoing recapitalisation exercise.
This is in addition to the commitment to underwrite the company’s proposed rights offer which seeks to raise about $80 million. The Government owns about 32 percent shareholding in Hwange and as an underwriter; it could double its stake if other investors do not follow their rights.
Apart from Lumbimbi and western area coalfields, Hwange has also identified deposits in the Lowveld and the company is currently conducting technical feasibility for possible acquisition. This part of the country is strategic because of its proximity to the South African market and port of Beira and Maputo.
Hwange management could not comment as the group is in a closed period, pending the release of its results.
Online Reporter