Hwange Colliery takes delivery of mining equipment

Published: 01 October 2013

HWANGE COLLIERY COMPANY says it has received mining equipment worth $11 million recently bought from China as the company seeks to raise production output which in the past has been dogged by constant breakdown of machinery.

In a statement accompanying the financial results, Hwange said the new equipment, which was set to be commissioned yesterday, would augment the machinery procured in October last year.

The machinery included 10 dump trucks with a carrying capacity of 55 and 100 tonnes respectively, two excavators and a 55-tonne crane.

The company is also in the process of acquiring other mining support equipment, so that it operates at full capacity to meet both domestic and foreign demand.

Production at the mine in the past few years has been affected by equipment constraints and legacy debts accumulated in the last five years.

The company is expected to produce an average of 400 000 tonnes per month at full capacity, but this has been reduced to just more than half due to the many challenges facing the company.

For the six months to June 2013, the company recorded a staggering 540 percent loss of $3,2 million from a profit of $0,5 million in the same period last year.

The company attributed the loss to poor cash flow exacerbated by legacy debt in excess of $140 million dating back to 2008.

This also impacted negatively on production volumes with total coal sales for the six months going down 0,54 percent to 913 440 tonnes from $918 491 tonnes the previous year.

Deliveries to Hwange Power Station for the period under review went up 56 percent to 580 818 tonnes from 373 126. Coke sales volumes decreased from 68 336 tonnes in the first half of 2012 to 25 839 tonnes in the period under review.

Finance costs also went up 22 percent to $1,1 million in the period under review from $0,9 million during the comparable period contributing to the loss position of the company.

The company's revenues experienced a 22 percent decline from $51,8 million in 2012 to $40,4 million during the period under review.

Basic and headline earnings per share were in the negative at US0,02c from US0,003c in the previous year.

Hwange recorded an operating loss of US4,5 million during the period from a profit position of $1,6 million in the previous year.

Total assets were 22,10 percent up to $250 million from $226 million in the comparable period. Liabilities were also 18,4 percent up to $146,4 million from $123,6 million in 2012.
- herald