Zimbabwe’s biggest coal producer, Hwange Colliery Company Limited (HCCL) is targeting to produce not less than 200 000 tonnes of coal per month, the company’s Managing Director Dr Charles Zinyemba has said.
Through the company’s Condensed Interim Financial Results For the half-year ended 30 June 2021 Dr Zinyemba said Hwange Colliery performance continues to improve due to established funding support, as a result, the firm is expecting operations to stabilize with immediate consistent production of 200 000 tonnes a month.
“A lot of work has gone into stabilisation of the business. With the Company being under reconstruction, it has been challenging to obtain both working capital and long-term financing for the business. It is however pleasing to note that as the Company’s performance continues to improve, funding support in the form of lines of credit to the business from local banks and regional financiers has likewise been established. As a result, the operations are expected to stabilise within the next 6 to 12 months. The immediate target is to consistently produce at least 200 000 tonnes a month.” Dr Zinyemba said.
During the period under review, the company’s revenue increased by 38 per cent from ZWL 2.19 billion in 2020 to ZWL 3.03 billion in 2021 on an inflation-adjusted basis. This was largely due to a combination of an increase in high-value coking coal sales and regular product price adjustments in line with market value.
The Company’s gross profit increased by 139 per cent to ZWL 851.60 million in historical terms compared to the same period last year. Net loss for the period under review decreased from ZWL 991.75 million to ZWL 538.76 million in historical terms.
The net loss is a result of ZWL 258.05 million exchange loss on foreign legacy debts and deferred tax of ZWL 441.15 million during the period under review.
The Company’s production increased by 51 per cent during the period under review, with the main challenges having been foreign currency to import spares and consumables. The sales volumes however increased by only 23.7 per cent compared to 2020 mainly as a result of the influence of Covid-19 on the market and logistics, as well as the reduced thermal coal offtake. Going forward, the Company has targeted to increase coking coal production and sales which will in turn increase capacity to discharge obligations to creditors as well as create a positive balance sheet in the medium term.
Hwange Colliery experienced a fatality-free shift record as at 30 June 2021. A successful Covid-19 awareness and vaccination program, for both workers and the greater Hwange Community, was run by the Company.