Makomo overtakes Hwange in coal production

Published: 02 July 2014

Four-year-old Makomo Resources in 2013 overtook Hwange Colliery Company Limited (HCCL) to become the biggest coal miner in the country, latest data from the Chamber of Mines shows.

Owned 60 percent by locals and 40 by foreigners, Makomo is among the 20 companies that were given special grants to mine coal in the Matabeleland North province in 2010.

The firm's grant covers 7 000 hectares but the mine's production manager Bernard Zvigumbu told New Ziana current operations were only covering 500 hectares. Latest data from the Zimbabwe Chamber of Mines shows that coal production shot up 179 percent to around 4.9 million tonnes in 2013.

"Makomo Resources emerged in 2013 as the largest coal producer contributing 74.5 of total production," the Chamber of Mines said.

Makomo Resources director Raymond Mutokonyi said the firm had invested over $200 million in operations since it commenced operations.

"Further investments are anticipated," he said.

The dominance of Makomo Resources will likely be short-lived as the Chamber of Mines noted that there remained huge potential to increase production in the sector on the back of investments made by HCCL last year.

Dogged by capacity constraints and working capital challenges Hwange's production averaged 150 000 tonnes a month in 2013. Makomo on the other hand could produce up to 300 000 tonnes a month but was held back by low product demand. HCCL chairman Farai Mutamangira recently admitted that emergence of new players had hit hard on the triple-listed firm's once dominant position.

"In the past twenty four (24) months, HCCL has come under increased competition from Makomo Resources, Coal Brick (W & K) and Chilota Colliery. This competition has eaten into the market share of HCCL," he said recently.

Makomo recently acquired a $14 million coal washing plant from South Africa which is expected to boost production of premium coal products which would be exported to the region. The plant is expected to be commissioned this month. Makomo also acquired 12, 100 tonne trucks as well as six front end loaders.

Zimbabwe Power Company (ZPC) is the biggest client for Makomo, taking up over 97 percent of its production. It also supplies the agriculture industry. Coal products that Makomo is currently producing include thermal, peas, rounds, duff, nuts and cobbles.

- New Ziana