Resources concern, Hwange Colliery Company Limited (HCCL), swung to a profit of ZWL$577m in the six months to June 30,2020 from a loss of ZWL$2.3bn incurred in the prior comparative period.
This was underpinned by a massive increase in coal production and higher revenues.
Revenue for HCCL, which is under administration, went up 28% to ZWL$1bn for the period under review from ZWL$827m in the same period in 2019 owing to a combination of an increase in high value coking coal sales as well as frequent adjustments to product prices in line with changes to the Interbank rates.
Total production increased 84% to 596 876 tonnes during the period under review from 325,114 tonnes in 2019. This was attributed largely to an increase in production by the contractor.
“Our target going forward is to ensure that production is skewed to own mining as it is not only cheaper but more reliable particularly given cash flow challenges that have dogged the company in the recent past,” Bekithemba Moyo said.
The administrator, Moyo, took over the running of HCCL in 2018. Prior to HCCL being placed under administration, it was making gross losses for several years. Now, it appears, the coal miner is turning the corner.
The company’s total assets stood at ZWL$7.7bn from ZWL$2.7bn in 2019.
Coal production at HCCL’s underground mine stood at 78 573,which was 32% below budget during the first half of 2020.
Moyo said various initiatives were being implemented to improve underground mining.
“The successful commissioning of the Continuous Miner (CM) was done at the beginning of second quarter of 2020, albeit late, due to the additional scope of work on the scheduled major repair works on the CM,” Moyo said.
He added: “Corrective maintenance on the CM is planned in the second half of the year, to eliminate challenges encountered in the first half of 2020.
“In-line with the Life of Mine (LoM) schedule, the CM shall relocate from East Production panel to West Development panel before end of the year. A new Load, Haul and Dump (LHD) machine has been ordered and will be delivered before end of September 2020. The new LHD is envisaged to markedly impact production positively by improving underground S/Car road conditions, reducing time to repair and increasing reliability of underground mining machines. Plans are in place to adequately optimize the underground mine by introducing a third shuttle car.”
Coal produced from HCCL open cast pits stood at 518,303 tonnes, which was a 143 % increase in production from 2019 including 331,296 tonnes mined by contractor Zhong Jian who started in February 2020.
Total coal mined by Opencast JKL operations totalled 187,007 tonnes, a 13% decline in production from the previous year.
Moyo said this was largely due to continuous breakdown of equipment which is a challenge as the equipment is now antiquated.
“Most of these problems are currently being addressed and we are cautiously optimistic that they will be resolved by the end of first quarter next year,” Moyo said.
A total of 321,290 tonnes were delivered to Hwange Power Station during the period under review including contractor deliveries.
“The commissioning of the ESC 12 Rockdrill plant has had a significant positive impact in addressing coal sizing requirements as in accordance with the new supply agreement with Zimbabwe Power Company,which operates Hwange Power Station, Moyo said.