Struggling coal miner, Hwange Colliery Company Limited (HCCL) will in the next two years expand its monthly production from the current levels of 15 000 to 150 000 tonnes after the company entered into an equipment mobilization agreement worth in excess of US$15 million.
In its FY21 financial results, the company said the arrangement will enable it to increase production to 50 000 tonnes per month in the second half of 2022, then 100 000 tonnes per month first half of 2023 and 150 000 tonnes per month in the last quarter of year 2023.
In addition, the HCCL said Opencast operations at the JKL pit will continue to be capacitated in order to increase high value coking coal in the product mix, the target being to increase production to 90 000 tonnes per month by end of 2022.
The company also engaged a new mining contractor to increase high value coking coal with a target production of 20 000 tonnes per month.
These expansion projects are expected to improve its financial position and payment to its creditors.
HCCL remains suspended from the Zimbabwe Stock Exchange as it is under administration after failing to operate profitably and piling debts.
The group posted a net loss of ZWL$ 1.1 billion in historical terms which was 70 percent ahead of previous year loss position of ZWL$ 640 million.
“This was attributed to exchange rate impact on legacy debts. Legacy debts contributed ZWL$ 904 million (ZWL$ 781 million historical) of unrealized losses on inflation adjusted terms,” said the group.
Revenue grew to 146 percent in historical terms at $ 7.505 billion from $3.051 billion prior year driven by a combination of growth in sales from high value coking coal and regular product price adjustments done during the year in line with market value.
However, higher operating costs and exchange losses from legacy debts weighed down on margins.