BUSINESS REPORTER
Struggling coal miner, Hwange Colliery Company Limited (HCCL), which was placed under receivership four years ago, widened its losses in the six months to June 30, 2022 to ZWL$3.97bn from ZWL$871m reported in the prior comparative period, despite reporting an 88% increase in revenue.
The loss was attributed to a multi-billion exchange loss on foreign currency debt during the period under review.
Revenue for HCCL grew to ZWL$16.5bn in the reviewed period from ZWL$8.8bn reported in the same period in 2021.
“Despite the increase in revenue, the company posted losses for the period of ZWL$3.97 billion in inflation adjusted terms.
“The net loss is a result of ZWL$ 8bn exchange loss on foreign legacy debts during the period under review,” HCCL said.
The miner’s gross profit increased by 74% to ZWL$4.54bn in inflation adjusted terms compared to same period lasty year.
This was largely due to a combination of an increase in sales volume and regular product price adjustments in line with market value.
Total assets stood at ZWL$50.8bn compared to ZWL$48.4bn in the prior comparative period.
Production output soared 52% during the period under review.
The sales volumes also increased 74% compared to 2021.
However, HCCL was hit by limited availability of spares and the general increase in prices of maintenance spares and consumables, which adversely affected the company’s operations.
Total coal mined from open cast operations was 1 288 521 tonnes, reflecting a 55.59% increase in production from the previous year.
HCCL attributed the increase to the successful contract mining model the company has employed.
“A total of 676 387 tonnes of coal was produced for Hwange Power Station and Zimbabwe Zhongxin Electrical Energy for electricity generation during the course of the year, which was 124% increase from previous year. Deliveries into the power station were however negatively affected by limited stock holding space in the power station,” HCCL said.
However, production from underground mining was 19.49% lower than the previous year due to ageing underground mining equipment.
HCCL is now planning to procure two continuous miners within the next 18 months.
“This will result in the company’s underground mine reaching optimum production capacity. The first continuous miner is expected to be commissioned before the end of this year,” HCCL said.
The resources firm is also planning to have modular plants and washing plant located near the mining areas within the next 24 months.
“The company is set to receive a washing plant that will be located near mining areas. This equipment will be commissioned during the first quarter of 2023,” HCCL said.
