eBusiness Weekly
Business Writer
Coal miner, Hwange Colliery Company Limited requires at least $50 million to construct a new coke oven battery, which produces high value coke used in smelting plants.
Hwange decommissioned its coke oven battery in 2014 after it became too expensive to operate, managing director Mr Thomas Makore told Business Weekly in an interview.
“We engaged a consultant, who put the budget for a new plant at $50 million.
“Since the budget is very high, it is now in our medium term plans and what we need to do is to accelerate our turnaround and generate enough revenue to support the project.”
Prior to the decommissioning of the plant, Hwange, the second largest coal mining company exported coke to copper smelters mainly in Zambia and the Democratic Republic of Congo.
“It is a very profitable line but we need to have a plant running efficiently,” said Mr Makore.
In May this year, the Zimbabwe Stock Exchange-listed company entered into a scheme of arrangement with creditors aimed at affording the company operating space to implement its turnaround plan. This saw its assets protected from being attached over debts.
Under the arrangement, the company entered into structured payment plans with its creditors.
The scheme of arrangement, cost containment and increased production are part of the cocktail of actions and measures being undertaken to turnaround the company.
The roadmap places emphasis on short to medium term strategies to improve production.
In the recent years, Hwange’s production was severely constrained due to subdued capacity due to shortage working capital. The company also came under increased competition after the entry of new players its market share. Makomo Resources is now the major supplier of coal to Hwange Power Station, previously Hwange’s biggest customer.
The diminishing capacity of the industry has also reduced demand for industrial coal as most companies that use coal fired boilers have significantly scaled down while others have closed.
