Hwange Colliery profit dips

Coal miner, Hwange Colliery Company Limited (HCCL)’s profit plunged 78% to ZWL$1.5bn in the 12 months to December 31,2020 from ZWL$6.9bn reported in the previous year on reduced gain on net monetary position despite an increase in volumes.

Gain on net monetary position was ZWL$1.89bn in the year from ZWL$10.14bn in 2019.

Volumes for HCCL, which is under administration, increased 13% to ZWL$4.5bn from ZWL$4bn due to a combination of increase in high value coking coal sales and regular product price adjustments in line with market value.

The company’s administrator, Dale Sibanda said there were plans to boost coking coal output by year-end.

Acting managing director, Charles Zinyemba said HCCL was developing a second underground mining section.

“The current underground mining operations are producing an average of 30 000 tonnes per month. Plans are underway to develop a second underground mining section in the medium term, so that coking coal production will double when the new section is fully operational,” Zinyemba said.

“In addition, opencast operations at the JKL pit will continue in order to increase high value coking coal in the product mix. The current JKL operation is producing an average of 50 000 tonnes per month and the target is to increase production to 100 000 tonnes per month by the end of 2021.”

He said HCC aims to grow its market share of coking coal sales in neighbouring countries, as its coking coal and coke meet quality specifications in the ferro-chrome industries and smelters.

“The company will continue in 2021 with the momentum it gathered at the end of 2020 on exports, after it was negatively affected by Covid 19 during the first half of 2020,” Zinyemba said.

HCCL’s coking coal sales increased by 6.5% to 238 112 tonnes in 2020 from 223 662 tonnes in 2019. However, the coking coal sales volumes were however limited by washing capacity constraints as the plant was antiquated and needed retooling. The plant was completed and was commissioned in April 2021.

Total coal mined by opencast operations was 1104 036 tonnes, reflecting a 46% increase in production from the previous year.

Total coal from HCCL’s JKL pit was 353 143 tonnes, a 21% decrease in production from 2019, while at Chaba Mine, the contractor Zhong Jian mined a total of 750,893 tonnes, a 145% increase in production from 2019 done by the previous contractor, Mota Engil. However, heavy rains towards the end of the year flooded the pits and affected production from December into 2021.

A total of 658,031 tonnes of coal was delivered to Hwange Power Station during the course of the year, which was 18% increase from previous year. Main Underground Mine coal production was 49% below the previous year as coal production during the year was 136,137t, against a budget of 360,000t.

This was mainly because the Underground was affected for some months by a major breakdown on the Continuous miner which had to be taken out of the mine for major repairs. A new sandvik LHD was acquired to complement production.

In metallurgical operations a total of 642 197 tons of raw coal was processed at both Chaba and No 2 plants against a target of 1 410 396 tons which is 46% attainment of the target. In the outlook, HCCL eyes an increase in production and profits.

Zinyemba said the company will be focused on raising a significant amount of capital so that they can achieve the desired results.

Business Times

Zimbabwe gold buying prices 14 September 2023