Hwange gets US$20m for recapitalisation

from a local bank and the Development Bank of Southern Africa.
Sources close to the company said the regional financier had approved a short-term loan of US$4,6 million while a local bank has agreed to advance about US$15 million to the coal mining giant.
The funds would go towards recapitalisation of the open cast mines, acquisition of dump trucks, bulldozers as well as upgrading of the underground equipment, such as the dragline.
Some of the funds, sources said, would be channelled towards refurbishment of the coke oven battery. The company has contracted a European company to rebuild the battery.
“Hwange will start making some draw downs from a local bank soon while the US$4,6 million from the Development Bank of Southern Africa will be used to pay for equipment that the mine intends to acquire from SA,” said one source.
Hwange spokesperson Mr Burzil Dube was reluctant to comment on the matter, saying the company was in a “closed period”.
Hwange requires about US$175 million for new machinery for both underground and open cast operations.
Managing director Mr Fred Moyo has regularly referred to plans to raise US$175 million through two phases. Phase one, costing US$90 million would see an overhaul of existing operations while the second phase would see production rising to six million tonnes a year, a move into new mining areas and the servicing of infrastructure in these concessions.
The listed resource firm opened the year at US0,50c. In the past two months the mining blue chip firm has been driving the mining index.
Hwange is buoyed by increased production and its share price is gunning towards the US$1 mark. Yesterday, it closed at US80c after shedding off US10c in the past two days.