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Hwange Colliery accused of plundering $6,4 million

By Pauline Hurungudo

Hwange Colliery Company management is accused of plundering $6,4 million which was meant for exploration work, amid other corruption charges.

Mines and Mining Development Minister Winston Chitando flanked by his deputy Polite Kambamura (right) and Secretary Onisimo Moyo appears before a Parliamentary Portfolio Committee on Mines and Mining Development in Harare. — Picture by Wilson Kakurira
Mines and Mining Development Minister Winston Chitando flanked by his deputy Polite Kambamura (right) and Secretary Onisimo Moyo appears before a Parliamentary Portfolio Committee on Mines and Mining Development in Harare. — Picture by Wilson Kakurira

This was revealed yesterday, during the Portfolio Committee on Mines and Mining Development meeting, were Hwange Colliery board members affirmed that an audit had revealed the misappropriation of funds.

The ring-fenced $6,4 million funding from the government for exploration was said to have never reached the project as it was allegedly used without authorisation from the secretary of Hwange board.

This comes after government had put the firm under reconstruction due to debt and gross loss as revealed by Mines minister Winston Chitando during the Portfolio Committee on Mines and Mining Development meeting.

More cases of corruption at the mine also emerged.

Some service providers such as Shepherd Tundiya, were said to have been interfering with the firm’s operations giving instructions to board members.

Former director Thomas Makore was also accused of receiving payments from the mine even though he had resigned.

Government placed Hwange Colliery Company under reconstruction in terms of Reconstruction of State indebted Companies and Insolvency Act.

Hwange board secretary told the portfolio committee that the board having discovered the irregularities and elements of criminality, reported to the police before the reconstruction announcement.

Chitando, speaking before the Portfolio Committee of Mines and Mining Development, said that financial deterioration of Hwange Colliery led to government’s decision to put it under reconstruction.

“Hwange in 2018 was supposed to achieve a net of $5,2 million in 12 months but when the results were announced in June, Hwange posted a net loss of $23 million.

“If you look at the results of Hwange over the years, the biggest problem it had is how it has been making gross loss, because its revenue was less than its cost of inputs it was using to produce and that has been the problem in the last five financial years,” he said.

Chitando explained that most of the production at the mine was done by Motor Angels, which is a contractor, and up to end of September.

The miner owed Motor Angels $12 million.

Hwange Colliery Company then went to Zesa Holdings to request for a bail out and it was given a pre-payment of $15 million but $11 million of that coal is yet to be supplied.

This money was also said to have been diverted to exploration instead of coal for energy production, leading to the short supply.

The Hwange Colliery board was also tasked to come up with a turn-around plan, 20-point Turnaround Plan, and implement it to ensure that the organisation delivers the energy need with profit.

The five-year turnaround plan in 2018 was supposed to make a profit but instead led to more losses, thus $150 million is still owed to government.DailyNews