adminfears some of the money could have been misused.
“We have a problem of the debts that have accumulated over the past five years and this is affecting our liquidity position due to its costly nature. As such, we have engaged forensic auditors,” said Mr Mutamangira in an interview on Monday.
The company said in March the borrowings amounted to US$31,6 million. They have been rescheduled to periods of up to 24 months and would be serviced through “ring fencing” of specific customers. Borrowings amounting to US$1 million and below were being repaid on the basis of arrangements with lenders.
The chairman said most of the funds were obtained locally at high interest rates. Hwange Colliery requires close to US$200 million for recapitalisation involving the procurement of new equipment.
Recently, the company said it had concluded mining equipment supply facilities worth US$32 million as the company sought to boost output. Substantial deposits, all funded from internally generated funds, have been made. Deliveries of the equipment are expected by June this year, said the company.
In December last year, the Zimbabwe Stock Exchange-listed coal miner acquired open-cast mining equipment worth US$6 million from South Africa, through a short-term funding facility structured with one major customer.
Hwange has been facing challenges in capital raising, stalling the recapitalisation exercise. The company said it had engaged a financial advisory firm to spearhead the raising of long-term credit to recapitalise its operations. Last year, the company sold two million tonnes of coal and coke, down from 2,5 million tonnes a year ago.
Production was mainly affected by equipment inefficiencies. Total coal sold was 1,68 million tonnes, down from 2,4 million tonnes sold a year earlier while coke sales (including breeze) rose to 228 201 tonnes from
74 877 tonnes. Hwange Power Station accounted for 54 percent of coal sold in 2012. Exports rose by 28 percent to 260 803 tonnes, up from 203 096 tonnes. Hwange’s main export markets include Zambia, the Democratic Republic of Congo and South Africa. Revenue for that period fell to US$104,2 million from US$107,8 million in 2011.
Export revenue of US$26,1 million accounted for 25 percent of the total turnover compared with US$13,4 million which was equivalent to 12 percent a year earlier.
Hwange says the export revenues are expected to continue rising, given the anticipated increase in production volumes and the delivery of the new equipment. Operating profit was up 73 percent from US$4,1 million a year ago to US$7,1 million. Net earnings declined to US$3,1 million compared with US$3,9 million. Administrative costs were down US$27,5 million from US$31,2 million in 2011.
Online Reporter