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Acting managing director Mr Stanford Ndlovu told shareholders last Friday a deposit of US$2,2 million had been made to SHEC. The delivery of the equipment was expected at the end of next month.
“A total of 13 pieces of heavy-duty mining equipment is currently being shipped from China and will be commissioned at the mine by the end of July 2013.
“The company is now executing the acquisition of drilling equipment worth US$5 million from other overseas suppliers. Procurement of additional mining equipment from China North Industries Corporation and XCMG, totalling US$22 million is being executed and delivery (is) expected before the end of the year.”
Earlier, the management said the equipment would ensure the company doubled production to four million tonnes. Mr Ndlovu also highlighted the company remained troubled by legacy debts accumulated in the last five years.
He said a forensic audit revealed the company had unrecorded liabilities totalling US$19 million, due mainly to what he called Maputo transaction (US$5 million), BancABC coke facility (US$3 million), OHO Siminon invoices (US$6 million and differed tax (U$2 million).
“Further, the audit ascertained that the company liabilities are in excess of US$150 million and the amount was incurred during the period 2009 to 2011,” he said.
“Debt redemption strategies being pursued hinge on the ramping up of production volumes and the rescheduling of most of the liabilities.”
Mr Ndlovu said some creditors owed about US$13 million had dragged the company to the courts.
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 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 the 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, equivalent to 12 percent a year earlier.
Hwange said the export revenues were 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. Borrowings amounted to US$31,6 million.
Giving a trading update for five months to May, Mr Ndlovu said the company’s performance was “fairly satisfactory” and that the company was on course to meet the production target for 2013.
Online Reporter