THE Government has, once again, placed coal mining firm Hwange Colliery Company Limited (HCCL) under reconstruction in the latest bid to revive its operations.
The placement of the company under reconstruction is the second time in about two years after the High Court blocked the initial attempt in 2020, saying the decision by the Government would have created a “potentially unwholesome situation for Hwange”.
The Government owns about 42 percent shareholding in HCCL, the country’s oldest coal mine.
In issuing the reconstruction order, in terms in terms of section 4 of the Reconstruction of State-Indebted Insolvent Companies Act [Chapter 24:27] (No. 27 of 2004), Justice, Legal and Parliamentary Affairs Minister Ziyambi Ziyambi appointed Mr Munashe Shava, the chief operating officer of Great Dyke Investments, as the administrator.
Ms Mutsa Mollie Jean Remba, a partner at Dube, Manikai and Hwacha legal practitioners was appointed the assistant administrator.
“The company under reconstruction shall be under the control and management of the administrator; and the boards of the companies under reconstruction shall be divested of the control and management of the companies’ affairs,” said Minister Ziyambi in a Government gazette published yesterday.
The minister said any person managing or controlling the companies’ affairs in any capacity other than simply as a member of the board will remain in the office.
Minister Ziyambi is now expected to make a High Court application seeking an order confirming the reconstruction. With new generators at Hwange thermal power station expected to come on line in the next few months, capacitating HCCL has become a priority to ensure uninterrupted supplies of coal to new generators.
Makomo Resources, another coal mining company in Hwange, has also been struggling although there are indications that production has resumed but at a slower pace.
Already, Zimbabwe Power Company (ZPC), the electricity generating unit of ZESA Holdings has started stockpiling coal for unit seven at Hwange thermal plant.
ZPC intends to build a buffer stock in an attempt to ensure uninterrupted supplies when the new generator comes online. Unit seven, which is expected to be switched on in November this year is part of the US$1,2 billion expansion of the Hwange power plant, an exercise that will add 600 MW onto the national grid.
Each generator will be churning out 300 MW with unit 8 coming online during Q1, 2023.
Hwange has six generators, with a designed capacity of 920 MW, but are frequently out of service due to constant breakdowns because they are too antiquated.
The coming in of the new generators will help Zimbabwe improve the power situation.