BUSINESS REPORTER
Resources concern, Hwange Colliery Company Limited (HCCL) suffered a ZWL$8.6bn loss in the 12 months to December 2022 from a profit of ZWL$98.32m reported in the previous year, largely due to the adverse impact of the legacy debts.
In a statement accompanying HCCL financial results, administrator Munashe Shava said some price discovery challenges also affected the company’s input costs and profitability.
“The company posted a loss of ZWL$ 8.6bn for the year. The loss was mostly attributed to the exchange rate impact on legacy debts. Legacy debts contributed ZWL$30.70bn of unrealised losses in inflation-adjusted terms,” Shava said.
Revenue, however, improved by 139.76% to ZWL$ 77.73bn in 2022 from ZWL$ 32.42bn in 2021 on an inflation-adjusted basis due to the increase in sales tonnes.
Coal production increased by 63% while sales volumes increased by 45% compared to the prior year.
“Despite the remarkable increase in production and sales compared to the previous year, the underground mine section was affected by delays in the commissioning of new equipment, while the market for NPD (nuts, peas, and duff) and Duff products was depressed,” the administrator said.
The company intends to continue increasing coking coal production and sales, which will in turn increase capacity to discharge obligations to creditors as well as create a positive balance sheet in the medium term.
Hwange continued to emphasise a low-cost, high-productivity strategy to significantly reduce costs while remaining viable.
Shava said tight controls remain on costs, and this has had a very positive impact on cash flows as well.
He said the strategy of low capital investment, low risk of losses, and high production output by outsourcing opencast mining also continued in the period under review.
The company said 2022 was a safe year with no fatal accidents.
Hwange has embraced a risk- and opportunity-based approach to all its operations to enhance its journey to zero harm.
This ensured that production was done safely, with minimal negative impact on the environment, and that quality products were delivered to customers.
The focus during the period under review was on increasing production and sales of high-value coking coal.
Raw coking coal and clean coking coal sales increased by 36%, from 594,482 tonnes in 2021 to 808,315 tonnes in 2022.
The total coal produced by opencast operations was 3,128,884 tonnes, a 73% increase in production from the previous year.
A total of 1,198,539 tonnes of coal were delivered to Hwange Power Station during the year, which was an increase of 63% from the previous year.
“Deliveries into the power station were, however, negatively affected by challenges at the power station and limited stock holding space at the same. Underground mine coal production declined by 24% compared to the previous year.
“This was mainly due to delays in commissioning the new underground mining equipment due to Covid-19 restrictions that affected the movement of the engineers from the original equipment manufacturers,” Shava said.
