Hwange Colliery to scale up production
HWANGE Colliery Company Limited (HCCL) projects to scale up high-value coal production from the current 15 000 tonnes per month to 150 000 tonnes per month in the last quarter of the year 2023 as part of measures to unearth the company’s potential.
To increase production, the coal miner says it has entered into an equipment mobilisation agreement for the Underground Mine, that will result in the company getting new underground mining equipment valued at more than US$15 million in the next two years.
“This arrangement will enable us to increase production to 50 000 tonnes per month in the second-half of 2022, then 100 000 tonnes per month first-half of 2023 and 150 000 tonnes per month in the last quarter of the year 2023 compared to the current production of 15 000 tonnes per month,” financial results for the year ended 31 December show.
“In addition, Opencast operations at the JKL pit will continue to be capacitated in order to increase high-value coking coal in the product mix, the target being to increase production to 90 000 tonnes per month by end of 2022.”
The firm added that it has also engaged a new mining contractor to increase high-value coking coal with a target production of 20 000 tonnes per month.
As part of strategies to boost production at Chaba Mine, the mine said it is in an advanced stage to engage a new mining contractor to increase thermal and industrial coal.
“This will result in increased monthly production by 40 000 towards the end of 2022. This will enable the company to meet its demand of dry products.”
The production is targeted to commence during the first quarter of this year and will generate about US$3,4 million in 2022.
Colliery noted that in the period under review, production increased by 49,5 percent and sales volumes also increased by 39 percent compared to the prior year.
“Going forward, the company is targeting 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.
During the period under review, the focus was on increasing production and sales of highvalue coking coal. Raw coking coal and clean coking coal sales increased by 226 percent from 63 294 tonnes in 2020 to 206 564 tonnes in 2021.
The coking coal sales volumes were however, limited by washing capacity constraints and the company redressed it by recommissioning a washing plant during the period under review, it noted.
The coking coal. Image taken from NS Energy
For Opencast operations, 1 804 663 tonnes were mined, a 53 percent increase in production from the previous year.
A total of 733,102 tonnes of coal was delivered to Hwange Power Station during the year, which was an increase of 11 percent from the previous year. Deliveries into the power station were however, negatively affected by plant challenges in the power station and limited stockholding space, it said.
Meanwhile, revenue improved by 31 percent from $7,2 billion in 2020 to $9,4 billion in 2021 on an inflation-adjusted basis.
The firm said this was largely driven by a combination of an increase in sales of high value coking coal and regular product price adjustments done during the year in line with market value.
Gross profit increased by 26 percent from $1,6 billion prior year to $2,1 billion in inflationadjusted terms this year.
Legacy debts contributed $904 million of unrealised losses on inflation-adjusted terms.