HomeBusinessHCCL to raise $10m for underground mining

HCCL to raise $10m for underground mining

Hwange Colliery Company Limited (HCCL) is working on the next phase of its recapitalisation plan that will see about $10 million being raised for underground mining operations, an official has said.


The recapitalisation comes after the Zimbabwe Stock Exchange-listed entity on Friday commissioned equipment worth $31,2 million for its open cast mining operations. The $31,3 million recapitalisation will result in HCCL’s output rising to 500 000 tonnes per month.

Currently its total output —which is made up of open cast mining, contractor in the form of Mota Engil and underground mining — is at 350 000 tonnes per month.

Speaking at a media de-briefing, HCCL managing director Thomas Makore said the company had already invited bidders for underground mining and was working on selecting successful bidders.

“The second phase is addressing underground [mining] so we have invited business from the market for supplying underground mining equipment and funding; we are at the final phase of selecting suppliers and financiers and in a matter of weeks, we should have a decision. We are looking at just below $10 million,” Makore said.
“In a matter of within a week we should have made a decision,” Makore said.

HCCL underground mining operations’ output is at least 45 000 tonnes and is aiming to get to 60 000 tonnes after the recapitalisation process.

He said the recapitalisation of the coke and battery operation will take longer although the company is in the final phase of selecting bidders. Makore said the process for resuscitation coke and battery would take over 12 months.

The company is operating at between 55% to 60% in the thermal coal business and 50% in the industrial coal business.

The group seeks to diversify into regional markets that include DRC, Zambia and South Africa under its turnaround strategy.

Makore said the impact would be reduced cost per tonne production and sales increases which would help HCCL start to service its obligations to employees.

The company owes workers at least $34 million in salary arrears and it is currently paying $200 per month to staff members. HCCL has a staff complement of 3 000. The salary arrears are of between six and 12 months.

Makore said the production for 2015 was better compared to 2014 due to the contribution of Mota Engil and sales have increased as the group scaled down on barter deals resulting in them working with limited partners. He said under the barter deals arrangement, the company was paying for some of its services with coal as it did not have cash.

HCCL is into coal mining, both underground and open cast, pit layout drilling and blasting, dragline stripping, throw blasting and coal processing. The company also produces coal for railway steam locomotives.

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