AN Indian company BEML/Ravathi has set aside $13,04 million for the purchase of equipment for coal mining company Hwange Colliery Company under a credit facility — in a deal that is likely to boost production at the mine.
The equipment which comprises drills, excavators, dozers and hydraulic machinery is expected by the end of June and will result in an increase in coal production volumes to 105 000 tonnes per month.
Hwange Colliery requires $150 million to fully recapitalise and has only accessed about $30 million through various arrangements that include loan facilities.
Indian ambassador to Zimbabwe, Mr Jeitendra Tripathi, who visited the mine, last week announced that he hoped the investment would translate into increased coal production volumes at Hwange.
“We had an agreement with Hwange Colliery where the company will get equipment through a buy-credit facility by Ravathi of India and this of course will be made possible through the engagement of EXIM Bank of India. Officials from HCCL visited several companies in India to broker partnerships and credit lines to improve coal production at the company,” said Ambassador Tripathi.
He said the coal producer had been attracted to India by the favourable buy-credit schemes that were available and companies had showed interest in partnering Hwange Colliery.
The ambassador revealed that his government was also keen to invest in solar energy adding that companies from India had started working on a feasibility study on providing alternative power in Bulawayo, while in Gairezi they were looking at setting up a hydro-power project.
“There is a proposal to the government of India for installation of solar lamps and tower that will improve access to alternative energy whose increased demand cannot be met now,” he said.
HCCL board chairman Mr Farai Mutangamira said securing equipment which would comprise drills and excavators from India would go a long way in turning around the troubled company’s fortunes.
“This is not a joint venture but a deal we have entered with an Indian company which is supplying us with equipment on a credit basis. We were attracted by the credit facility offered by India companies and this is a good deal for Hwange. We are in need of machines from India so that we meet a target of about 4,1 million tonnes this year,” said Mr Mutangamira.
He said the company was also on the verge of securing a $16.5m loan from a regional bank which he declined to disclose and added that an additional $16 million consignment of equipment was expected by September from Belarus.
The company’s efforts to export their coal products to international markets such as Asia has been affected by logistical challenges chief among them transportation which has forced the company to delay exports.