Zimbabwe’s ailing coal producer, Hwange Colliery’s Company output is declining on a daily basis due to heavy rains which pounced over the past few months, Mines and Mining Development Minister has said.
Minister Walter Chidakwa revealed this while at Mimosa Mines recently saying Hwange coal production has been adversely affected by heavy rains which destroyed most parts of the country’s infrastructure, including bridges that were swept away.
Production fell from 1,8 million tonnes to 1,55 million tonnes on the backdrop of high fixed overheads as well as challenges experienced with the new equipment which was commissioned sometime last year.
The result of this was an increase in direct costs of production without a corresponding rise in output. Chidakwa said the company is failing to utilise the new equipment acquired from Belarus and India due to working capital shortages.
Revenue declined to $67,6 million from $83,9 million due as sales fell 13 percent and the decline of coal and coke prices.
Borrowings increased to $51 million from $12 million due to long-term loans from Export Import Bank of India and RBZ/PTA Bank. The company is working on a facility from Agribank, which will enable the company to purchase consumables.
HCCL early this year had some of its equipment auctioned over unpaid debts to a Chinese company.
The mining company is facing litigation for claims amounting to $20,6 million while cases worth $20,1 million have been awarded against it.