Hwange losses widen on coal prices, reduced sales and output

30 Sep, 2014 - 15:09 0 Views
Hwange losses widen on coal prices, reduced sales and output Makomo mine.. Picture by Percy Musiiwa

The Sunday Mail

THE blood letting continued at Hwange Colliery Company as losses widened to US$7,9 million in the six months to June 30 2014 from US$3,1 million in the comparable year ago period on declining coal prices on the international market and reduced sales.

Coal and coke commodity prices on the local, regional and global markets dropped an averaged 12 percent in the review period.

Sales also fell to US$33 million from US$40,4 million.

All of Hwange’s investment entities – Zimchem Refineries, Hwange Coal Gasification Company and Clay – performed below expectations, contributing US$77 558 to the loss.

In the six month-period, HCC sold a total of 764 813 tonnes compared to 913 440 tonnes last year.

Deliveries to Hwange Power Station declined to 394 451 tonnes from 580 818 tonnes, while HCC and HIC coal sales fell from 207 142 tonnes to 197 342 tonnes.

Brighter Prospects

HCC has however managed to tie-up a US$18,2 million facility from PTA Bank and an additional US$15 million from then Export and Import Bank of India for the purchase of new mining equipment.

A US$6 million facility, through a prepaid arrangement with a major customer, has also been secured.

In addition, Mota Engil, a mining contractor from Portugal, has begun operations, with expectations that coal production will average 200 000 per month.

The company will make a decision by November 30 2014 either to refurbish the coke oven battery or to build a completely new one.

“In the short term , the company plans to acquire additional concessions that will avail additional coal reserves.

“The focus now is on securing the Western Areas concessions, which is critical and strategic to the future growth of the business,” said Mr Farai Mutamangira, HCC chairman.

 

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