Zimbabwe govt bails out Hwange

Zimbabwe govt bails out Hwange
Published: 02 June 2022
The government has issued US$112m worth of Treasury Bills to settle debts owed by Hwange Colliery Company (HCCL), Business Times reported.

Government is the biggest shareholder in HCCL with a 37% stake followed by British business mogul, Nick van Hoogstraten, who holds 31% through his investment vehicle Messina Investments.

The issuance of the short- term debt instruments backed by the government with a maturity of less than one year went towards the settlement of debts owed to Portuguese contractor, Mota Engil, PTA Bank loan and Scheme of Arrangement

"As part of the ongoing restructuring plan, the Government of Zimbabwe through the Ministry of Finance and Economic Development issued TBs of US$41m and USD$18.2m in settlement of the Mota Engil and RBZ/PTA Bank loan, respectively. The Government of Zimbabwe has agreed that the government support be treated as a loan payable over 15 years with a 7% interest per annum in accordance with the provisions of the scheme of arrangement.

"An additional US$52.3m worth of treasury bills were issued towards the Scheme of Arrangement bringing the total support from the Government of Zimbabwe to US$111.5m worth of treasury bills, as approved by the Ministry of Finance and Economic Development,'' HCCL said. Hwange used to enjoy a monopoly in coal production in Zimbabwe.

But, the emergence of other players such as Coal Brick and Chilota Colliery, among year to December 31, 2022, others, have chipped off its revenue for HCCL grew 31% to ZWL$9.4bn from ZWL$7.2bn in 2020.

This was attributed to a rise in sales of high value coking coal and regular product price adjustments done during the year.

Coal extracted from its open cast mining in the reviewed period stood at 1 804 663 tonnes, reflecting a 53% increase from the previous year.

HCCL shipped 733 102 tonnes of coal to Hwange Power Station, which is an increase of 11% over the previous year.

However, HCCL profit plummeted to ZWL$29m in the period under review from ZWL$2.7bn as the miner reported that coking coal sales volumes were limited by the washing capacity in the reported period.

Hwange's focus in 2021 was on boosting production and sales of high-value coking coal, which has a high export value.

The company said; "Raw coking coal and clean coking coal sales increased by 226% to 206 564 tonnes in 2021 from 63 294 tonnes in 2020 ."

At the 3 Main Underground Mine, coal production increased by 27% over the previous year.

This was due to increased operational funding and credit facilities provided by spares suppliers.

Going into the future, HCCL said it is targeting to increase export sales volumes.

As the company is targeting to increase export sales HCCL has engaged a contractor to resuscitate beehive coke ovens to produce high value foundry coke which have a high demand in the export market.
- Business times
Tags: Hwange,


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