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Zim colliery re-equips as it seeks to raise output to 450 000 t/m

27th March 2015

By: Oscar Nkala

Creamer Media Correspondent

  

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Zimbabwe’s Hwange Colliery Company (HCC) has started taking delivery of new heavy earthmoving equipment from Belarus, marking the beginning of a re-equipment programme aimed at boosting coal production from 300 000 t/m to at least 450 000 t/m.

The equipment – paid for with a $18.2-million loan from PTA Belaz Bank late last year – includes two bulldozers, five front-end loaders and ten
dump trucks, each with a capacity of 130 t.

HCC MD Thomas Makore says the acquisition of the equipment is an integral part of the company’s recapitalisation strategy, which is focused on the replacement of the mostly obsolete equipment still being used in all mainline opencast and underground operations.

After a series of unsuccessful bids to secure external joint venture partners or financiers for recapitalisation, owing to its huge debt
burden, HCC has, over the past few months, regained some confidence with Belarusian and Indian financial institutions.

PTA Belaz Bank has also provided the company with an additional $31.2-million vendor-financed loan facility for further unspecified
equipment acquisitions, while the Indian Exim Bank has agreed to provide HCC with a $13.2-million loan for the acquisition of three
front-end loaders, two excavators, bulldozers, drill rigs and two water bowsers.

Delivery is expected by the end of April. Makore says the company still needs more financing partners because it has to replace nearly all the mainline operations equipment, including the main dragline, which was acquired in 1983.

“Most of our plant and equipment is old or does not have spares. So we are working on recapitalising the underground mine so that we can increase production levels.

“The dragline, one of our important pieces of equipment, is very old, having started working here in 1983. So, from time to time, we have
breakdowns, and the situation is exacerbated by a lack of spares. However, the dragline is still working at our opencast pit.”

The company hopes that the new equipment will contribute to the revival of operations in three underground mines that ceased
operations over the past decade.

Faced with stiff competition from new coal miners, Makore says, HCC is also moving to diversify its portfolio of coal products to include
specialised coke products, coal-bed methane gas, plasma gasification and liquified coal and gas.

Until 2008, HCC was Zimbabwe’s sole coal producer but has lost its market dominance over the past few years.

A proliferation of newly licensed coal miners has since 2008 largely displaced Hwange from the local market, while rising imports of
cheaper but higher-quality refined coal from the Mmamabula colliery, in Botswana, threaten to further decimate the company’s market base.

One of the new competitors, Makomo Resources, has since replaced HCC as the main coal supplier to the Zimbabwe Electricity Supply Corporation, delivering 52% of the Hwange thermal power station’s requirements.

Of the more than 20 new coal mining companies licensed to operate in the Hwange-Binga coalfield of Matabeleland North, at least six have
started operations, while others are hamstrung by funding constraints or repeated failure to secure operations clearance from the
Environmental Management Authority.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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