HWANGE Colliery Company Limited forecasts volumes to top 400 000 tonnes per month by year end when production at the 3 Main Underground Mine resumes. In the mid-year, production at HCCL rose to around 300 000 tonnes per month but the company expects further growth in the second part of the year.
This will be aided by shifting to lower production cost techniques, among other initiatives under the company’s survival strategy going forward.
HCCL Board chair Winston Chitando, told stakeholders at a cocktail on Thursday that following the acquisition of heavy duty mining equipment from Belarusian manufacturer of haulage and earthmoving equipment BELAZ and Indian firm Bharat Earth Movers Limited (BEML) under vendor-financed facilities from PTA bank and India Exim bank, the company’s turnaround strategy is well on course.
Mr Chitando said focus will also be on growing the business back to profitability through high volume production above break-even point, cost reduction and increased sales volumes.
“We will also balance the mix of products so that it includes low and high margin products such as thermal and coking coal respectively. The company looks set to bounce back to its blue chip status through teamwork determination, focus and hard work,” said Mr Chitando.
The new Hwange, which is on a journey to increase production and move to profitability, according to Mr Chitando, has entered into two 25-year coal supply agreements, one with Zimbabwe Power Company and the other with Per Lusulu power, an independent power producer in Matabeleland North.
“These off takes form an anchor to the company’s sustained turnaround strategies and therefore we are confident Hwange Colliery’s future looks bright,” said Mr Chitando.
Hwange is recovering from a myriad of challenges that were threatening the company with extinction. These included the legacy debts that were threatening to choke the colliery company.
Mr Chitando said a 100 Day Rapid Results turnaround project with main focus on production and productivity improvement implemented by the company also brought with it improved performance from the second quarter of this year.
“The Gijima Phase 2 project is also now in motion with the establishment of six teams focusing on safety, quality, processing, coal movement, exports and equipment availability. To this effect production volumes, which had risen to around 300 000 tonnes per month by mid-year are expected to top 400 000 tonnes per month by year end when production at the 3 Main Underground Mine resumes.”
The Hwange chairman expressed gratitude to Government through the Ministry of Mines and Mining Development for the “enormous support they have rendered the company in its turnaround plans”.
The company has since started exportation of coke to South Africa to earn foreign currency needed to fund operations.
HCCL managing director, Mr Thomas Makore said: “Our goal is to increase the contribution of export revenues from the sales of coking and industrial coal as well as coke. We will also be commencing exploration and drilling of the western areas coal concession in this quarter.”