Hwange wants Coal Gasification deal revisited

shareholding while the Chinese company holds the remainder.

Hwange now wants the BOT deal to be revisited, with the local coal mining giant becoming a majority shareholder.

“Forensic auditors appointed to carry out an investigation into the operations of Hwange Coal Gasification Company to date have established that there was mismanagement and there have been massive externalisation of funds,” said Hwange Colliery company secretary Mr Thembelani Ncube.

At the company’s annual general meeting on April 24 this year, Hwange recommended that HCG managing director Mr Guo Feng and marketing manager Mr Su Longmin be suspended pending disciplinary hearing on various charges of mismanagement, including misappropriation of funds.

The business relationship between Hwange Colliery and the Chinese company were strained, with the coal mining giant accusing its partners of failing to honour some of their contractual obligations.

For instance, TSETC is said to have installed a coke oven battery with annual capacity of 150 000 tonnes, half the capacity of what was agreed under the BOT deal.

The Chinese partners were supposed to set up a coke oven battery with an annual capacity of 300 000 tonnes while Hwange’s contribution to the investment was to provide coking coal at a subsidised price.

Hwange further alleges that TSETC overstated its monetary investment, claiming it had spent US$40 million on the coke oven battery installation “when in fact it spent less than US$10 million”.

Furthermore, sources raised allegations of misrepresentation of financial information including under-declaration of profits by the management. Sources said Hwange “believes” the value of coal delivered to HCG could now be more than what TSETC invested, “the reason why they now need a majority stake”.

On Sunday, Hwange Coal Gasification issued a statement calling for an extra ordinary general meeting to be held next Monday in China to discuss matters that came out from the April AGM and to discuss representation from Hwange Colliery Company on the proposed change to the ownership structure.