HARARE – Hwange Colliery Company Limited (Hwange) says it plans to acquire a multi-million dollar drilling equipment from South Africa.
Farai Mutamangira, the group's chairperson, said the equipment — which is expected to take delivery during the last quarter of 2013 — will augment the mining machinery that was procured by the company recently.
“There is no doubt that these recapitalisation initiatives currently being implemented organically will result in improved production performance,” he said.
The listed coal mining concern early this year acquired equipment worth $17 million from Sany Heavy Equipment Company Limited of China aimed at boosting production and increasing revenue.
In the half-year to June 2013, Hwange posted a $3,2 million after-tax loss compared to $512 000 in prior period largely attributed to a poor cash-flow and high legacy debts.
“This was exacerbated by legacy debts in excess of $140 million dating back to 2008 and antiquated equipment,” said Mutamangira.
In the period under review, operating loss was $40,4 million compared to $51,8 million during the same period last year while sales revenue for the six months was down to $40,4 million from $51,8 million.
Coal sales during the period under review amounted to 913 440 tonnes down from 918 491, while coke sales volumes declined to 25 839 tonnes from 68 336 tonnes.
Finance costs increased to $1,1 million for the period up from $0,9 million in previous comparable period due to penalty rates emanating from overdue borrowings.
Total assets and investments amounted to $250 million compared to $226,7 million as at June 2012 while capital reserves were $103,6 million against $103,1 million for the same period last year.
Mutamangira said the company would continue with its cost containment thrust through the rationalisation of its operations.
The company has in recent months embarked on a retrenchment exercise while last month its mine workers went on strike over unpaid salaries.
Coke and coal products, Mutamangira said, would remain targeted at both local and regional countries.
“The commodity prices are forecast to stabilise before end of the third quarter and start to increase in the fourth quarter,” said Mutamangira adding that the board and management has confidence in the current recapitalisation initiatives being implemented that will result in increased coal and coke production.
“Positive financial performance is projected for the year end,” he said.
In the period under review, no dividend was declared.