JOHANNESBURG (miningweekly.com) – Zimbabwean coal producer Hwange Colliery has posted first-half coal sales of 913 440 t for the six months ended June 30, only marginally lower than the 918 491 t achieved in the first half of 2012.

This came amid a liquidity-challenged macroeconomic environment, which, despite boasting a low interest rate, dampened consumption behaviour and pushed a general decline in the coal and coke commodity prices on the local, regional and global markets.

The sluggish economic growth further implied reduced economic activity and general low capacity utilisation across industries, which Hwange said narrowed the availability of lines of credit against a huge working capital deficit in the business.

Restricted access to capital did not, however, diminish coal deliveries to the Hwange power station, which received 580 818 t for the first six months of 2013 – a 56% increase on the 373 126 t supplied to the power station in the first six months of the prior year.

“This resulted in Zimbabwe Power Company continuously holding adequate stock levels for uninterrupted power generation,” chairperson Farai Mutamangira said in a results statement on Monday.

However, general sales of hard coking coal decreased from 270 276 t in the first six months of 2012 to 207 142 t for the period under review, while sales of coal fines and breeze decreased from 206 753 t in the first half of 2012 to 99 641 t for the first six months of 2013.

Coke sales volumes decreased from 68 336 t for the first half of 2012 to 25 839 t in the period under review.

RECAPITALISATION INITIATIVES

Over the period, the JSE-listed coal producer took delivery of mining equipment worth $11-million, which was intended to augment $7-million worth of mining machinery procured in October 2012, to improve production efficiencies at the company’s Zimbabwe operations.

“There is no doubt that these recapitalisation initiatives currently being implemented organically will result in an improved production performance.

Meanwhile, Mutamangira said the company would intensify its cost containment thrust through the rationalisation of its operations and the alignment of its business model to benchmarks.

Hwange achieved revenue from sales of $40.4-million for the first six months, compared with the $51.8-million revenue recorded during the prior comparable period.

The company swung from an operating profit of $1.6-million for the first six months of 2012 to an operating loss of $4.5-million for the period under review, which was largely attributed to the poor cash flow position of the company and exacerbated by legacy debts in excess of $140-million.