Hwange in Over US$10 Million in Profit
Coal producer Hwange Colliery Company recorded a US$10.2 million profit before tax during the quarter ended 30 September 2023, as stated by the company’s Administrator, Eng Munashe Shava, in a trading update for the quarter.
Rudairo Mapuranga
Hwange Colliery, in 2022, was placed under reconstruction for the second time in two years to revive the miner who has been plagued by financial losses.
According to Shava, despite coal sales dropping, the company still managed to achieve profits during the quarter ended 30 September 2023. This was due to efficient machinery acquired during the first quarter of 2023.
“The sales prices for coal dropped slightly for the quarter ended 30 September 2023. The input costs remained relatively constant, thereby affecting the company’s profits. However, the company performed fairly well during this quarter, with unaudited profit before tax amounting to US$10.2 million, better than the previous year’s.
“The company’s performance during this quarter was significantly better, with both production of 989,503 tonnes and sales of 911,245 tonnes almost doubling from last year’s performance, mainly due to efficient and effective machinery acquired during the first quarter of 2023,” Shava said.
The company realized 911,245 tonnes in sales in the third quarter, with Hwange Power Station coal (“HPS”) accounting for 48%, raw coal 39%, Hwange Coking Coal (“HCC”) 1%, and Hwange Industrial Coal (“HIC”) 12% of the total sales. During the same period last year, the company sold 388,487 tonnes comprising HPS 7%, raw coal 55%, HCC 6%, and HIC 32%. Contaminated coal sales accounted for 8,143 tonnes (2022: 25,309 tonnes) in the same period.
For the nine months to 30 September 2023, the company realized 2,795,303 tonnes (2022: 1,060,976 tonnes) in sales, with HPS accounting for 43%, raw coal 39%, HIC 17%, HCC 1% (2022: HPS 9%, Raw coal 48%, HCC 8%, and HIC 35% of 1,060,976 tonnes). Contaminated coal also amounted to 30,229 tonnes (2022: 71,933 tonnes). Sales improved from 1,060,976 tonnes for the same period last year to 2,795,303 tonnes, achieving a positive change of 163%. The positive change is attributed to a doubling of production as well as an increase in marketing efforts to sell off the mined coal.
The company aims to stop underground mine production for the next six months to prevent the loss of mined coal through spontaneous combustion, as production exceeds sales. The quantity of mined coal is deemed sufficient to meet the operating needs of the company.