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Business Reporter
HWANGE Colliery Company says new equipment acquired from Belarus and India last year remains under utilised due to working capital shortages needed to optimise its usage.
In June last year, the coal miner commissioned new equipment worth about $32 million and monthly production was expected to reach over 500,000 tonnes per month. However, monthly coal production has remained below 200,000 tonnes.
“It’s tough, but obviously we’re doing our best to keep the company afloat,” managing director Thomas Makore said in an interview.
“We acquired new equipment but we are not fully utilising it because there’s no working capital to achieve optimum usage of the machines.”
Makore said the company, whose shares trade on the Zimbabwe, Johannesburg and London stock exchanges, needed about $7,5 million to build up enough stocks of consumables such as fuel, explosive and lubricants.
Some faulty equipment had been “fixed.”
He said the company would only be able to assess performance once enough consumables were secured.
On the issuance of Treasury Bills to Hwange’s creditors by the Reserve Bank of Zimbabwe, Makore said the central bank was working with the Finance Ministry to finalise the issue.
The RBZ intends to issue TBs to creditors of Hwange Colliery to avoid litigations. Hwange’s trade creditors would be issued with TBs, which they can liquidate on maturity or use as security to borrow, at a discount. Hwange owes various creditors in excess of $60 million.
The Zimbabwe Asset Management Company has already acquired and restructured Hwange’s loans amounting to $14,8 million as part of its efforts to help distressed companies that have good turning around prospects. The restructuring involves extending the loan repayment period, grace periods for capital repayment and reducing interest rates.
With challenges facing Hwange, the country is likely to miss targeted production output of 4,8 million tonnes of coal. Hwange and Makomo Resources are major coal producers in Zimbabwe.
Online Reporter