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A FRONT Loader 1723 which was part of the new Hwange Colliery Company Limited’s $31 million equipment acquired under a vendor financing loan from India and Belarus went up in smoke at the company premises, further denting efforts by the coal giant to maximise on production.
The equipment went up in smoke on 27 August, HCCL managing director Mr Thomas Makore confirmed, adding that management suspect a case of sabotage or arson.
The company has since made a police report to Hwange police, RRB number 2459571.
Hwange Colliery acquired equipment from BEML of India worth $13,3 million that was funded by India Exim bank, while the other batch of equipment worth about $18,2 million came from mining equipment supplier Belaz of Belarus under a PTA Bank loan facility.
The equipment was touted to increase production at the mine from 300 000 to 450 000 tonnes a month.
The new equipment has been dogged by controversies as the latest calamity comes at a time when the company was trying to douse mounting criticism over the state of the equipment with some shareholders alleging that some of the equipment were acquired with faults.
“We acknowledge the incident with the Front End Loader 1723 from Belaz that occurred on 27 August 2015 at 1400hrs. The machine suffered fire damage to the operator cabin and surrounding areas, however, the extent of the damage is yet to be ascertained,” said Mr Makore.
The HCCL technical investigations team is on the ground investigating the cause of the incident. At the same time, the accident has been reported to the police as there is a suspected case of sabotage or arson.”
Mr Makore said the front end loader was being driven from the metallurgical operations yard to the Chaba plant and an operator discovered that something was burning after driving past the opencast main entrance point when he was questioned by the police in relation to the incident.
“On disembarking from the machine, he saw smoke coming from the bottom of the Operator’s Cabin. He called for assistance and the fire was put out by the fire response team. A security guard was stationed nearby to prevent any tampering with evidence on the machine,” he said.
The company could, however, not disclose any more information as the matter was said to be under investigation.
Over the past few years, the former giant coal mining entity has been under spotlight as its business fortunes have been going down.
Management admitted a few months ago that about five of the heavy machinery that were acquired under the new deal had faults prompting one of the major shareholders Nick Van Hoogstraten who hold 30 percent stake in the mine to come out in the public and allege underhand deals over the manner the deals were structured.
As if that was not enough workers were reportedly not happy after HCCL board chairman Mr Farai Mutamangira admitted that most of the company’s problems were self-inflicted.
He said part of HCCL’s problems were largely due to poor decision making by its board and management.
He admitted that the company could have thrown $120 million down the drain through shady deals.
“Put together I think the company was severely prejudiced of more than $100 million on that Hwange Coal Gasification project I think it was one of the stupid things we have ever done as Hwange Colliery but anyway we are trying to mitigate that loss,” Mr Mutamangira said last month after a board tour of the company’s operations.
Workers were not happy that the company could have lost such huge amounts of money when at the same time it was in salary arrears which are reportedly behind by more than 24 months.
Meanwhile, Mr Mutamangira, however, said the company was satisfied with its divisionalisation programme which seek to improve operating efficiencies of the company’s four units.
The company embarked on the divisionalised organisation structure where it organised its divisions namely the mining, estates, medical and engineering into strategic business units last year but wholly adopted the strategy this year.
“We did this so that we can arrest areas where we were losing money and I think we have reasonably sort of singled them out, that here we are losing money and then address that. The business model has been reviewed and a divisionalisation strategy implemented.
However, the estates and medical units are the ones that have been successfully divisionalised to date,” he said.
Mr Mutamangira said the Estates and Medical Divisions were now separate strategic business units fully discharging their monthly financial obligations including staff salaries.
“If all these things (business units) operate like one we can easily get lost in that structure because the other one will be making a loss while the other one will be making a profit. It’s a mixed bag of everything.
“So divisionalisation focuses on distinct units standing on their own so that we begin to see their operating efficiencies as units before they feed into the whole structure,” Mr Mutamangira said.
He said the estate division has already turned to be a profitable unit.
“Estates (division) has been operating on its own and has been very successful. Their turnover has been $12 million. Their costs are slightly below that, so they can make a profit.
“Medicals are just about breaking even. Then we come to the operations that’s where the problem is because we have a number of elements that need to be sorted out,” Mr Mutamangira said.
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