Hwange rebirth model for other mines

21 Jun, 2015 - 00:06 0 Views
Hwange rebirth model for other mines

The Sunday News

Hwange Colliery
Gabriel Masvora in Hwange

TIN mining company in Kamativi is now history while asbestos mining companies Mashaba and Shabanie are also in the mortuary. Their death certificates point to almost the same ailment — lack of funding to recapitalise and unfortunately the country has allowed this to continue to the extent that it is now something seemingly so distant that one day they will come back to life.

The country’s largest coal mine — Hwange Colliery Company — had also caught the bug which was slowly decimating its core structures and pointers were that this once blue chip company was heading to the graveyard.

The symptoms were now visible to all. It was sinking under the weight of a $160 million debt. Production had gone down to around 300 000 tonnes per month which is just 40 percent of the company’s installed capacity.

Workers were and are still owed salaries dating from last year and above all critical staff had started packing their bags in search of greener pastures.
At one time it had lost its number one position as the top coal producing company in the country to its neighbour Makomo Resources.
In fact it was now in the intensive care with seemingly no cure in sight.

But Government which is the majority shareholder of the company thought twice and came up with a cocktail of measures to ensure the company, which was formed in 1899 and holds many people’s lives together, is saved from extinction.

In 2011, Government and other shareholders of the coal mining company came up with recapitalisation initiatives that were aimed at re-energising the company.
Board chairman Mr Farai Mutamangira said in August 2011 the company flighted a tender for the supply of mining equipment with a specific requirement to vendor financing since the company’s books were deep in the red.

Almost a year later, the first of the initiatives started coming on board.
“In November 2012 we got equipment worth $6 million from Bell South Africa,” he said.

“We also later got 13 pieces of equipment from Sany International Development Company valued at $12 million.”
But it was in 2013 that the company made a breakthrough that has manifested itself into the steps that it is taking today to boost production.

“An equipment supply agreement was consummated with BEML of India in December 2013 amounting to $13,03 million, with negotiations for funding starting early 2014. The Export and Import Bank of India came on board with a finance structure that had a condition precedent of a sovereign guarantee,” said Mr Mutamangira.
At the same time, the company was also engaging Belaz from Belarus for an equipment supply agreement worth $18,2 million.

“This time PTA bank came on board with the financing structure which was eventually ceded to the Reserve Bank of Zimbabwe in February 2015.”
And on Friday, Hwange Colliery commissioned the 24 different types of mining equipment from India and Belarus which are seen as a game changer in the way the company will move forward.

HCCL managing director Mr Thomas Makore said the new equipment would bring instant results with production set to increase from an average of 300 000 tonnes to 450 000 per month amounting to annual coal production close to six million per year.

“Certainly this is a positive development for Hwange Colliery in as far as the company’s turnaround strategy is concerned,” said Mr Makore.
He said increased production would bring smiles to the company’s 3 000 strong workforce and all the people in the town.

“Hwange Colliery is excited with this new equipment. We do not take the trust you have bestowed on us lightly. As a team we will deliver on our mandate and utilise this equipment for the benefit of our nation, our company, our shareholders and the communities in which we operate,” he said.

For sure, the nation at large looks forward to Hwange to play a critical role especially in the supply of enough coal to Hwange Power Station for electricity generation, a service which has become a headache for the whole country due to its scarcity.

Hwange’s revival is not only being followed by those in power generation but most sectors of the economy.
Probably the dignitaries who came to witness this milestone achievement tell how important Hwange is to the economy.

Vice-President Phelekezela Mphoko, Agriculture, Mechanisation and Irrigation Development Minister Dr Joseph Made whose interest was maybe to check on whether he could go back and promise tobacco farmers that there could be enough coal to cure their crop next year, Finance Minister Cde Patrick Chinamasa, Minister of Welfare Services for War Veterans, War Collaborators, Former Political Detainees and Restrictees Cde Christopher Mutsvangwa and RBZ Governor Dr John Mangudya, among others, were present during the commissioning ceremony.

Traditional leaders and other community leaders from around the mining towns also came to be part of the event.
Mines and Mining Development Minister Cde Walter Chidakwa said the Government was now expecting to see the benefits of the increased coal supplies from the new equipment.
And on top, he said, this was another example of how Government was fulfilling the Zim Asset agenda.

“Government takes pride in such efforts and is confident of the initiatives being done by Hwange Colliery Company.”
VP Mphoko said this was also a sign of the success of the Look East policy and the long standing relations Zimbabwe has held with Belarus through the Soviet Union and India.
“Zimbabwe will continue to grow using links with its allies,” he said.

Yes, such is the story of Hwange which if all what has been done and said could result in increased production it could once again become a major player in the economic turnaround efforts in the country.

Additionally, the Hwange model should also be used to revive all the mining companies, especially those that Government has some links with so that once again Zimbabwe can pride itself to be fully benefiting from all the vast minerals in its belly.

Share This: