By Daniel Chigundu
MINES and Mining Development Minister Winston Chitando says he expecting that the upcoming annual general meeting (AGM) of Hwange Colliery will finalise the sale of Hwange Town and houses as has been agreed.
Hwange is currently saddled by a huge debt overhang that has seen it failing to attract investment or accessing loans for capitalisation from financing institutions both inside and out of the country.
The debt has been affecting production as the company has no resources to purchase the much-needed equipment to up production, leaving it to rely on obsolete and antiquated machinery which is constantly breaking.
The company requires about US$500 million for capitalisation which mainly covers new equipment.
As part of its resuscitation program, the company decided to dispose of its town in Hwange to the Ministry of Local Government for about US$300 million and also its 5000 houses so that it can focus on its core business.
Appearing before a Parliamentary Committee on Mines and Energy, Minister Chitando said no bank is willing to lend money to Hwange in its current form and is expecting the AGM to finalise the sale of the town to help clear the debt.
“The decision to sell the town was agreed in principle but as you are aware Hwange is a quoted company there are procedures of how things are supposed to be done.
“It has to be decided at the AGM which is scheduled for June or July this year,” he said.
Asked how the company will deal with former workers and people of Malawian, Zambian and Mozambique origin who occupy the houses and have nowhere to go when the houses are eventually sold, Minister Chitando said the workers are going to be considered in the deal.
“Yes the workers are owed some money and there is going to be some set-off with the houses,” the Minister said.
Hwange owes its workers about US$70 million in unpaid salaries for the past five years which has resulted in wives of the workers to demonstrate against the company for almost six months now.
The company is also looking at trimming its excess workforce from about 3500 to around 1500 as a way of reducing the wage bill.