The Sunday Mail
A fortnight ago, we ran a special feature on Hwange Colliery Company and by the time we went to print the company’s management had not responded to emailed questions. On Thursday, 16 days after the questions had been sent, Thomas Makore, Hwange’s chief executive officer responded. Read on:
Q: Workers say they have gone in excess of 12 months without salaries, how far true is it?
A: The situation is not as abnormal as portrayed by the media. The 12 months you referred to are cumulative over a period between 2013 to 2014 and not a continuous period of non-payment.
We paid most of the workers their full salaries in September and December 2014. There are only a few that have not been paid including management. In addition, as from January 2015, we adopted the divisionalised organisation structure where we are organised into strategic business units: Mining Divisions, Estates Division and Medical Division.
Estates and Medical Divisions started to pay full salaries in January 2015. The Mining Divisions have started to pay workers by grade.
Q: If it’s true, what are the reasons the situation is like that?
A: See answer under 1.
Q: Workers also allege that the Zesa target of 120 000 tonnes is being met, realising $3,6 million every month, against a salary bill of $2,6 million. This is without consideration to other cash inflows, yet they still go unpaid.
A: We have legacy debts that we service that reduce the amount of money that we receive and Zesa struggles to pay us our full invoice due to liquidity constraints in the market.
Q: What’s the position of the parked Volvo and Sany equipment? How and why are they parked?
A: Some of the Volvo and Sany equipment are working.
The ones that are not working is because of spare parts that have long lead times and are sourced from South Africa, China or Europe.
Q: Similarly, there are allegations that instead of maintaining and servicing equipment, HCC is resorting to sub-contracting, often at exorbitant prices. Why is that so? Of particular concern is why Colbro is being paid $650 000 per month to move coal, when the servicing, repairing and maintaining of the conveyor belt would cost much less than that.
A: We have our own maintenance teams.
We sub-contract high level maintenance or repairs that require specialised equipment. Colboro’s contract is for haulage of coal between the stockpile and the processing plant and the amount is not as high as $650 000 per month. We are in the process of raising funding to repair our conveyor plant so that we can reduce this cost. Contractor services are solicited due to the magnitude of the operation and such contractors are never hired to milk the company as due process is done through tender.
Q: May you also shed light on the circumstances surrounding the re-engagement of Portnex, whose contract had been cancelled two years ago due to irregularities?
A: We export our products to various customers including Portnex. The export transactions are regulated by MMCZ in its capacity as the sole agent in the export of minerals in Zimbabwe in order to check the integrity of the commercial transaction. Portnex and other customers are vetted by ourselves and MMCZ.
Q: Similarly, Mota Engil is said to have moved its high capacity machines to Mozambique because it is owed $14 million?
A: Mota Engil is our contract mining partner and has capacity to meet contractual obligations in our favour. They have secured a new contract in Mozambique which is even larger than our contract at Hwange. They are at liberty to make their own corporate decisions and they are alive to their contractual obligations in terms of their contract mining agreement with Hwange and it is running smoothly.
Q: What is the state of workers welfare funds like pensions, funeral cover, medical aid, etc. Workers allege management has not been remitting deducted charges such that most providers have withdrawn their services, for example Nyaradzo.
A: The company is in a turnaround phase. Further, we are in a close period and cannot disclose more information about the financial obligations of the company.
Q: What happened to the battery and are we likely to see it coming back to life? This given the importance of the battery to operations at the colliery.
A: See answer under above question.
Q: There are reports of HCC failing to make $800 worth of repairs to drilling machines yet the company ends up sub-contracting for as much as $18 000. What’s the rationale?
A: We have just resuscitated one of the drills and it is working well. We prefer to use our own equipment than to sub contract.
Q: How do you justify your seemingly endless trips outside the country and your absence from the heart of company operations? Incidentally you were not there when we visited.
A: In my role, I spend my time at the mine and in Harare. I make business trips when necessary in order to meet with key suppliers, financial institutions to fund our operations and capital projects or key export customers and rail logistics partners.
Q: What are the production targets of HCC and are these being met?
A: See answer under question on our financial obligations.
Q: Any other information that you might deem necessary and relevant, given the significance of the colliery to the national economy.
A: Hwange Colliery is of strategic importance to the economy of Zimbabwe.
There are various initiatives underway to turn the fortunes of company around in a sustainable way.
It is fair to say that coal supply to the ZPC power stations has been secure for more than six months and we contributed to that. Our new Belaz open cast mining equipment from Belarus is now at the Beitbridge border post en-route to the mine.
