HARARE - Zimbabwe’s Hwange Colliery has set its eyes on exporting coal to South Africa to wriggle its way out of a financial crisis exacerbated by debts and obsolete equipment.
Hwange currently exports largely to Zambia. The company said South Africa and Zambia could boost its export market.
“Trial orders of industrial coal to new blue chip customers in Zambia and South Africa were also undertaken (in the period under review),” said acting managing director, Charles Zinyemba.
The company said South Africa and Zambia had an upside potential after offshore volumes contributed 4 percent to profits in the half year to end June compared to the targeted 20 percent,
It said local sales fell 15.97 percent to 0.57 million metric tonnes compared to the same period last year with thermal coal contributing 40.5 percent and industrial sales 59.5 percent.
“Coking coal sale will be a major area of focus and growth as the production from underground increases. The ultimate strategy will be coke production which is hinged on the company’s establishment of its own coke oven battery,” explained Zinyemba.
Hwange has subsequently focused on “coming up with its own coke oven battery while it continues takeover discussions” for the Hwange Coal Gasification coke oven battery in pursuit of a Built Own Operate and Transfer agreement with Chinese investors.
The company has remained under judiciary management, with accounting firm Grant Thornton issuing an adverse opinion on the results because of accounting glitches, adjustment of the value of plant and equipment and concern uncertainty emanating from a skewed financial position where the company’s liabilities surpassed its assets by about ZWL285.8 million.
Hwange’s earnings increased 128 percent to ZWL30.5 million, translating to a profit of ZWL3.5 million for the period.
“The contract miner stopped mining on or about 15 December 2018 and only resumed mining in August 2018. In addition, the company only resumed open cast mining in March 2019.
“Owing to the above, production declined by 52 percent,” said Hangwe admiinstrator Bekitemba Moyo.