Hwange revenues soar 128%

By Staff Reporter

 Hwange Colliery posted a profit of ZW$3.5 million against a loss of ZWL$23 million recorded in 2018 for the half-year ended 30 June 2019. This was largely attributable to the company’s revenue, which increased by 128% from ZWL$30.5 million for the six months ended 30 June 2018 to ZWL$69.8 million for the period under review.

On the operational front, Hwange noted that the contract miner stopped mining on or about 15 December 2018 and only resumed mining in August 2019. In addition, the company only resumed open cast mining in March 2019. Owing to the above, production declined by 52% from 819,859 to 394,704 for the period under review. It was however noted that HCCL production increased marginally from 344,694 tonnes to 394,704 tonnes and it has continued to increase for the first three month of the second half from 158 981 tonnes to 224 191 tonnes.

Total sales tonnage declined by 16% from 682 152 in 2018 to 573 238 during the period under review. The sales mix however improved with HCC/HIC coal sales increasing by 4.2% from 268 570 tonnes to 279 790 tonnes. HPS sales to Hwange Power Station decreased by 38.% from 376,695 tonnes to 232,222 tonnes. The cost of sales increased by 16% to $35.7 million from $30.6 million for the prior year comparative period. As a result, the company posted a gross profit of ZWL$34 million compared to a gross loss of ZWL$144,000 in prior year.

The Administrator of HCCL however recognized the obligations of the Company under the Scheme, including but not limited to, debentures, and proposed payments to employees and other creditors.

These will be incorporated into the Administrator’s proposed scheme of reconstruction, as modified where necessary, to comply with the Reconstruction Act.

Looking ahead, Hwange hopes to increase production to 250,000 tonnes per month inclusive of the mining contractors’ contribution. Further, the company has deliberately decided to mine the JKL Pit and underground, which will result in the production of high value coking coal. Going forward, the plan is to invest in a coke oven battery with beneficiation in mind and this should result in a significant increase in revenues. The company continues to explore pillar mining, which if successful, will result in production volumes being north of 300,000 tonnes per month.

The Company’s open cast operation contributed 195,173 tonnes for the half year, which represents 60% of the total half-year production. Constraints in the internal logistics and processing section of the value chain were however noted. Efforts continue to be made to stabilize the operation for it to be able to consistently produce 120 000 tonnes per month in the 2nd half of the year. On the other hand, the company is working on stabilizing the underground mine operation which averaged 21,000 tonnes per month for the period under review. The target is to bring the operation to 50,000 tonnes per month, which will contribute significantly to the Company’s bottom line and enhance exports.

The company made some significant efforts to stabilize the Jig and Floatation plant during the first half of the year. The plan for the 2nd half is to resuscitate the HMS plant so as to increase the washing capacity.

The Company’s intended takeover project of the Hwange Coal Gasification Company (HCGC) Coke oven battery pursuant to a BOOT Agreement with its Chinese partners in HCGC was delayed. The Company has placed more emphasis and attention on coming up with its own coke oven battery while it continues takeover discussions with HCGC.

 

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