Hwange scouts US$400m for new projects
HWANGE Colliery Company Limited (HCCL), which is currently buoyed an agreement struck with its creditors, intends to scout for more than US$400 million resources from both the internal and external financiers in order to rehabilitate the coal miner.
Managing director Mr Thomas Makore said last week on the sidelines of the 45th Kamandama Mine disaster anniversary that the company will fund most of its operations through a long-term plan developed by management.
There are plans to leverage on three new concessions, including a new coke oven battery (use to produce coke from heating).
“At the moment we have the Scheme of Arrangement, which we are confident that it will work, but we have already set our sights on bigger long-term projects which will sustain the company for many years to come.
“We have a total of three concessions, of which two of them need about US$150 million to start operating, and the third one is for gas, which I don’t know the exact figure but it will be more than US$50 million.
“And we also need US$50 million for the coking battery to make a cumulative figure of over US$400 million needed for new projects.
“As we speak, we are looking for many lines of credits both internally and externally to make sure we find working capital in time to kick start all these projects,” said Mr Makore.
HCCL is ramping up production to pay debts and re-invest in its mines.
Output has since grown by over 118 000 tonnes to 170 000 tonnes from 52 000 tonnes in April.
By September, Hwange is expected to break even.
Though a huge investment is needed, an estimated US$15 million is being sought for shortterm projects.
Over the years, Hwange faced several of litigations and court orders which granted creditors the right to seize the company’s assets. Negotiations with banks to finance the new plan are believed to be currently underway. The financial resources will be channelled to production activities at opencast, underground and metallurgical operations so that production volumes will increase to above break-even point.
Hwange is confident that it will continue to have an adequate supply of coal to the national electricity utility, including supplying profitable coal and coke grades to industry and export markets.