Chronicle Editor
Fairness Moyana in Hwange
(HCCL) Holdings is poised for a massive turnaround anchored on new business opportunities and partnerships linked to the rising domestic and regional demand for coking coal including tapping into the US$1,5 billion Dinson Iron and Steel project.
As part of comprehensive recovery strategies, the giant mining firm will leverage on strategic partnerships with key industry players like Dinson, which recently kick-started iron and steel production at its Manhize plant in Chirumanzu District, Midlands Province.
Through close collaboration with such entities that consume its products, and other partners, the company expects to reap high production volumes while harnessing technological efficiencies with a target to achieve about 1,2 million tonnes of coal annually through underground mining joint venture arrangements.
The interventions are part of HCCL Holdings’ Business Improvement Project (BIP) that seeks to explore low-cost and high-margin opportunities.
Key deliverables under the model revolve around market share, productivity, plant efficiencies, costs, financial returns, sales, revenues, project management, capital structure, balance sheet optimization, value accretive partnerships, governance, and compliance.
The Dinson Iron and Steel plant is already projected to produce 600 000 metric tonnes of steel products in its first phase before ramping up to about five million tonnes per annum, which will need huge and steady coke supplies to power its smelters.
Although Dinson has its sister coke-producing unit in Hwange, the demand from Manhize, touted to be one of the biggest steel producers in Africa, goes beyond the firm’s capacity as a single supplier.
Speaking to the media during a joint tour in Hwange on Friday, HCCL Holdings acting managing director, Mr William Gambiza, said leveraging on these developments the coal miner has since entered into partnerships that have given birth to contract mining, resuscitation of its coke oven battery, construction of a coal washing plant and increased coal production.
One such investment is the establishment of a coal-washing plant that will feed into the coke oven battery to produce the lucrative coking coal product.
“We looked at our regional market and the Manhize project and we saw it fit to invest in the coal washing plant to make sure we produce for our markets,” said Mr Gambiza.
“As a country, we have Manhize that is coming on board, as well as other companies such as Zisco and foundries that require coke so this investment is meant to speak to that development.
“This plant will be key in washing the coal that we will produce from the mines from our various sources once we produce the clean product, it will find its way to the coke oven battery and also some other customers who might need the clean product after it has been produced,” he said.
“In terms of capacity, it has the ability to do around 720 000 tonnes per annum with a minimum recovery of about 80 percent and that will be enough to feed into the mainstream markets that we have.
“We invested US$3.2m after we noticed that the demand for our coal products was high. In terms of project completeness, we are over 90 percent, what is left are touch-ups on the water reticulation plant.”
HCCL Holdings has already managed to procure the necessary pipes and the reservoir, which is required to ensure that the washing plant runs effectively, added Mr Gambiza.
He said the washing plant was one of the projects funded from internally generated cashflows while plans to resuscitate the underground mine were at an advanced stage with about US$2.5 million being mobilised to restart operations under the first phase.
The company is also in the process of concluding a US$50 million joint venture deal with Chinese investor, Zhong Jian Investments (ZJI) that will see the development of 1,2 million tonne per annum underground mine known as 3 Main North.
“We are looking at a minimum of around US$2,5 million just to get it running, but we are continuously investing in opening new sections and expanding our products,” ZJI project technical consultant, Engineer Akim Mutiti, said.
“We expect to commence the actual mining at the end of November into December this year. For now, our engineers have drilled about 460 metres underground as we develop the mine,” he told journalists.
“The mine will run for about 25 years, thereafter, we will do further exploration as we try to extend its life span through expanding operations.
“The overall investment for mining and the coking coal processing plant will be around US$50 million. The bulk of the coal will be converted into coke.”
Under to the arrangement, ZJI controls 77 percent of shareholding while HCCL Holdings holds the remaining 23 percent.
Eng Mutiti said the project was in full support of Government’s vision to develop a US$12 billion mining industry with the investment of the US$50 million serving a as testimony.
Meanwhile, Mr Gambiza, further emphasised that the BIP will prioritise a data-driven approach to customer value management (CVM). This critical business strategy focuses on understanding customer needs and tailoring operations to deliver maximum value.
The strategic restructuring of HCCL resulted in the creation of seven independent companies. These include the Hwange Mining and Processing Company, Hwange Property Company, Hwange Medical Company, Hwange Zambezi Agriculture Company, Hwange Lubimbi Energy Company, Hwange Khula Fund and the 3-Main North JV Company, a joint venture with Chinese firm Zhong Jiani Investment focused on developing a new underground coal mine for US$50 million.
The developments being spearheaded by the company have the potential to retain HCCL as a going concern to profitability and mark a turning point in the re-awakening of the sleeping giant.
HCCL Holdings was placed under reconstruction following years of struggling and financial misfortune as debts mounted before the Government, which is a major shareholder rescued it from further demise.
The cost of rehabilitating its coke oven battery, which ceased to operate more than 15 years ago has been set at US$8.2 million and work has since begun in earnest following the contracting of a Chinese company.
Bongani Ndlovu
Online Reporter