By Leonard Ncube
The minister of Mines and Mining Development Walter Chidhakwa has said Hwange Colliery Company will start mining coke in April to facilitate exports to save the company that is reeling under debts amounting to $350 million.
He said this yesterday at a meeting that was convened at the company’s offices after the Zanu-PF Youth League raised concerns to Speaker of Parliament Advocate Jacob Mudenda.
Also present at the meeting were Hwange Senator Cde Thokozile Mathuthu who is also the Deputy Minister of Information, Media and Broadcasting Services, local traditional leaders, Chiefs Shana, Whange, Dingane-Nelukoba, Nekatambe and Acting Chief Mvuthu.
Zanu-PF provincial members were also present.
Minister Chidhakwa said the Government would not allow HCCL to collapse because it is a strategic company.
“Government position is very clear. This company is strategic to the survival of this country. It’s strategic because power becomes a matter of national security which is why minerals are specified in the Minerals Act. Underground mining failed because the continuous miner machine broke down and $1 million is needed towards that. We hope to start producing coking coal in April and May,” he said.
In his presentation, HCCL managing director Engineer Thomas Makore said the company will in April resuscitate underground mining and also start paying workers and creditors.
Eng Makore said the future of the company depends on it going back to underground coal mining to get the best coke for export, which fetches more money than thermal coal which it is producing.
“We are deep in $350 million debt dating back to the $Zim era. We had three options which included closing the company and give in to creditors, go into judicial management and we opted for the third option of coming up with a scheme of arrangement which allows us to outline how we are going to pay creditors,” said Eng Makore.
He said the arrangement with creditors needed approval from the Zimbabwe Stock Exchange.
HCCL which employs more than 2 000 workers, produces 55 000 tonnes of coal per month, down from about 200 000 tonnes when the company was operating at full capacity.
“The $350 million is due today and all creditors want their money today. We got $111,5 million Treasury Bills which are in the form of a loan and we will convert them into cash in the bank then pay creditors part of the debt over a period of seven to 10 years and employees over three years,” he said.
“HCCL success was premised on underground mining but we are still doing open cast mining hence we can’t get high grade coke. This plan has been presented to the board and shareholder and we want to exercise our right to our 25 percent shareholder to take over assets so we can produce coke and sell to other countries. We are going to implement the plan next month and we expect a ‘yes’ vote from creditors today. A ‘no’ vote means the company goes into judicial management and closes and that’s bad for everyone.”
Eng Makore said last December, the company started paying its workers who had endured 36 months without pay starting with lower grades who got $200 each while those earning $400 and above will be getting 50 percent of their outstanding salaries.
Eng Makore said the company was geared to implementing measures to reduce costs.
Adv Mudenda challenged Government to link with other strategic partners saying failure of Hwange Colliery affects socio-economic life in Hwange.
Cde Mathuthu implored Government to buy out the other shareholders who she said were not showing concern about the demise of HCCL. The Chronicle