Hwange Colliery reconstruction plan gets the nod

THE GOVERNMENT has approved a reconstruction plan for Hwange Colliery Company Limited (HCCL), which was put under administration in August last year after it fell into financial distress.

Government owns 42 percent of HCCL. The reconstruction plan will see the company being split into separate entities — housing and estate; medical services and agriculture. Creation of a new power plant is also part of the plan.

Justice, Legal and Parliamentary Affairs Minister Ziyambi Ziyambi told The Sunday Mail that the plan had already been approved.

“Hwange Colliery was among the companies that was under financial distress and thereby became an ideal candidate to be under the Reconstruction of State-indebted Insolvent Companies Act,” he said.

“The whole idea being to find an administrator who comes up with a roadmap to make sure we turn it around.

“The administrator at Hwange has come up with a roadmap, which has been approved, and we believe, if followed, will lead to Hwange being profitable.”

HCCL administrator Mr Munashe Shava said the reconstruction plan will be implemented over the next two years to ensure the company returns to profitability.

“Pre-2018, Hwange Colliery had a debt of US$400 million and for a period of six or seven years prior, they were making a loss.

“We have come up with a scheme of reconstruction, which will include coming up with an estate company that will cater for the 6 000 houses and utilities that we have in Hwange.

“This will reduce the burden on the company, which has been paying utilities.”

Mr Shava said another entity, a specialist hospital, will cater for employees and the wider community’s medical needs.

“We have roped in top medical specialists from India and Dubai so that they can become partners,” he said.

“Our aim is to have a hospital that focuses on specialist operations, which are done outside the country.

“We want to promote medical tourism.” In terms of the reconstruction plan, he said, Lubimbi in Binga will be structured as a separate power company.

“Indications are we are sitting at over a billion tonnes (of coal). The Gwayi Shangani, a power line from Hwange, the 33kV line, passes through Lubimbi, so there is nothing stopping us from developing another power plant.”

With regard to the agriculture unit, Mr Shava said: “In addition, the climate conditions in Hwange are similar to the Lowveld. So, we have proposed to go into agriculture and focus on sugarcane and irrigation for various crops at the 95-hectare farm that we have. Recently, there was a study that was done in Lupane on wheat, and it was concluded it can thrive as well.”

He said the main company will remain a mining and processing concern.

Hwange recently had Units 7 and 8 refurbished.

Units 1 to 6 are currently being rehabilitated. The recapitalisation of HCCL is also meant to ensure uninterrupted supplies of coal to the units.