THE Hwange Colliery Company board should be immediately reconstituted as it lacks capacity and experience to transform the ailing giant coal mine, the Parliamentary Portfolio Committee on Mines and Energy has said.
Hwange Colliery has posted a series of losses in the last few years, being saddled by a legacy debt of $352 million and owes workers about $70 million in salary arrears. Recently, the board suspended managing director, Mr Thomas Makore, accusing him of insubordination and corruption.
In a latest comprehensive report issued last week on the state of affairs at the mine, the committee noted with concern how HCCL has lost market share in the last few years to competitors due to persistent inefficiencies.
“The Hwange board, which is heavily under capacitated through lack of numbers and experience, must be immediately reconstituted. Management is not experienced in the mining sector and therefore immediately requires an individual with vast mining experience to be appointed,” said the committee.
It suggested that locals should be given first preference when being appointed to both the board and management. Government must also have the money it expended on capitalisation of the colliery returned failure of which, shareholding from other shareholders must immediately be diluted commensurately, said the committee.
“All outstanding labour issues must immediately be resolved with particular emphasis on salaries as per settlement to avoid the strikes caused by non-payment thereof,” it added.
Other recommendations include the takeover of the Hwange Town infrastructure by the Ministry of Local Government, which should also assume responsibility for services such as roads, electricity, and sewage treatment. The colliery had earlier suggested selling the town for about $300 million to offset its debts. On this matter the committee says shareholders should approve sale of houses to current and former employees in order to reduce debts owed to employees. It stressed that Hwange Colliery requirement for foreign currency should be prioritised at the same level as fuel and other national priority projects.
Hwange Colliery manages the town and all social services and infrastructure, including the hospital, which provides services to employees and the public. The company also has a housing stock of over 5 000 houses. The colliery needs working capital of $5 million monthly with $500 000 foreign currency being required for spare parts and production inputs. Other challenges include delays in payment for coal by the Zimbabwe Power
Company (ZPC). The colliery supplies ZPC with 50 percent of its coal and struggles to pay its monthly obligations as it also struggles to pay salaries. ZIMDAILY