Makomo coal production un­der threat

Chronicle (Zimbabwe) - - Business Chronicle - Fair­ness Moy­ana

MATA­BELE­LAND North-based Makomo Re­sources’ ef­forts to im­prove or main­tain coal out­put at cur­rent lev­els are un­der threat as the com­pany’s fuel sup­pli­ers are de­mand­ing cash up­front on all trans­ac­tions.

Makomo Re­sources gen­eral man­ager Mr Sam­son Mab­vira said the de­mands be­ing made by the fuel sup­pli­ers were likely to dampen production tar­gets at the mine as they rely on fuels such as diesel and lu­bri­cants to power and op­er­ate min­ing equip­ment.

“There is a new chal­lenge that might af­fect our op­er­a­tions if it’s not ad­dressed quickly. We’ve learnt that some fuel sup­pli­ers are now de­mand­ing cash up­front or hard cash for de­liv­er­ies of the pre­cious prod­uct in the min­ing of coal.

“Most of our trans­ac­tions with clients don’t in­volve hard cash so the cash pay­ment de­mands from our fuel sup­pli­ers may ad­versely af­fect our ef­forts to in­crease vol­ume out­put,” said Mr Mab­vira in an in­ter­view on the side­lines of the cel­e­bra­tions held at the col­liery re­cently to mark the com­pany’s 6th year an­niver­sary.

Makomo is pro­duc­ing 63 000 tonnes of coal per month against a monthly pro­jec­tion of 200 000 tonnes.

The mine pro­duces ther­mal coal mainly for the coun­try’s ther­mal plants while a small por­tion goes to in­dus­try and re­gional mar­kets par­tic­u­larly Zam­bia.

Makomo is tar­get­ing to in­crease out­put to 300 000 tonnes per month by year end as it ex­plores other re­gional mar­kets.

The com­pany which uses con­tract min­ing is the largest coal pro­ducer in the coun­try, hav­ing taken over the po­si­tion from trou­bled Hwange Col­liery Com­pany Limited.

Mr Mab­vira said slow rev­enue in­flows caused by the chal­leng­ing eco­nomic cli­mate were ad­versely af­fect­ing their ef­forts to in­crease out­put as they were owed by their ma­jor coal con­sumers, the Zim­babwe Power Com­pany over $25 mil­lion.

“Since we are owed a lot of money by one of the ma­jor con­sumer of our coal prod­ucts, we are un­able to fi­nance sec­tions of production such as pur­chases of con­sum­ables which may be diesel, oil and lu­bri­cants for the min­ing machin­ery.

“At Makomo we say the sky is the limit as we can pro­duce ac­cord­ing to mar­ket de­mand. How­ever, if we are go­ing to meet some of our tar­gets, we need to make sure that we have ac­cess to fuel and the mar­kets to sell our prod­ucts.”

Makomo re­quires 25 000 litres of diesel daily which translates to 600 000 litres per month.

He said as part of mea­sures to keep op­er­a­tions on track, the mine was en­gag­ing some of its sup­pli­ers to pay off their debts through fuel.

“The cur­rent eco­nomic cli­mate is not favourable to all of us but we need to con­tinue min­ing coal. This is a chal­lenge to us and as part of be­ing on alert, we are in talks with some of our clients to pay their debts in the form of fuel”.

Makomo was re­cently awarded a power gen­er­a­tion li­cence to de­velop a 660 megawatt power sta­tion close to the mine at a cost of $3 bil­lion.

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