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Business Reporter
VICE President Phelekezela Mphoko will officially commission newly acquired mining equipment worth $31,2 million at the Hwange Colliery Company Limited (HCCL) next week.
The giant coal producer successfully closed two vendor-financed recapitalisation transactions in March this year through the PTA Belaz facility to the tune of $18,2 million and the India Exim Bank’s $13,03 million BEML facility.
The bulk of the equipment has been delivered to the plant.
“The equipment will be commissioned on June 19 by Vice President Phelekezela Mphoko,” HCCL managing director, Thomas Makore said yesterday.
It is hoped that the new equipment together with the work of a contractor-Mota Engil-will see output rising to a minimum of 450,000 tonnes per month.
The machinery comprises 10 dump trucks, five front-end loaders and two wheel dozers from Belaz while two excavators, two water bowsers, three front-end loaders, three bulldozers, three drill rigs, a motor grader and one tyre handler had been supplied by MEML.
Mota Engil was engaged last year to produce 200,000 tonnes of coal monthly and it began open cast mining in August.
Mota Engil’s total output has reached 996,000 tonnes.
HCCL announced that the contribution of the contractor had enabled it to work on stabilising its own production while bridging the gap between the purchase of new equipment and commissioning of the machinery.
The colliery also intends to start restructuring its balance sheet after management and the board secure the necessary support from major shareholders to launch a rights offer to retire a significant portion of the company’s debt.
The move will ultimately result in HCCL generating a positive cash flow and reducing its interest burden.
Since 2006, the firm has been battling a legacy debt of more than $100 million.
Commenting on the issue, Makore said: “The process (restructuring of balance sheet) is still with the Zimbabwe Stock Exchange and we’ll be advised in that regard.”
It is hoped that excess cash to be generated by the business post the rights offer will be channelled towards the retiring backlog in statutory obligations and payment of salary arrears. The rights offer process is expected to be launched soon upon receipt of all relevant regulatory approvals.
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