Hwange Colliery back to life, production exceeds 100%

HWANGE Colliery Company Limited (HCCL) saw production rising by more than 100 percent to 232 000 tonnes in the first quarter of the year, driven mainly by the reliability of equipment and improvement in operational efficiencies, a top official has said.

This comes at a time when HCCL has been implementing a Scheme of Arrangement that resulted in creditors agreeing to reschedule the US$352 million debt.

The Scheme of Arrangement has afforded the 119-year-old coal mining firm some breathing space to allow it to finance production and boost output.

HCCL managing director Engineer Thomas Makore told The Sunday Mail Business last week that the firm's equipment has generally been readily available and reliable, resulting in high output in the first quarter.

". . . the company closed the first quarter of this year at about 232 000 tonnes, which is more than 100 percent improvement compared to the same period last year," said Eng Makore.

"I think this was mainly because of two major reasons; our equipment has been available and reliable, and we were able to improve the efficiencies in our operations.

"The company will continue on this path to make sure we turn the fortunes of the company that has been in operations for years."

HCCL's production levels had recently tumbled on the back of obsolete equipment, even when the company invested US$31,2 million into equipment which was acquired from Belarus and India.

Part of the equipment immediately broke down due to hydraulic system problems. But ever since the equipment was attended to, and the Scheme of Arrangement agreed to, production has been steadily rising amid high hopes that HCCL will soon receive machinery to enable underground mining.

Said Eng Makore: "In the second quarter of 2018, we are pleased to announce that Hwange Colliery Company Limited's efforts to recapitalise and turnaround its fortunes will receive a major boost with the arrival of supporting equipment for our underground mine which includes the additional shuttle cars, a transformer, LHD, and a roof bolter, among other critical components."

The move will allow the company's 3 Main Underground Mine to operate at optimum level from an average of 10 000 to 50 000 tonnes per month.

Underground mining operations enhance HCCL's product mix, thereby improving product quality, production margins and revenue.

Eng Makore said they are working closely with a European firm which will be conducting exploration and drilling at its new concession in Western Areas.

Preliminary reports show that the new concessions have an estimated underground resource of about one billion tonnes. HCCL took delivery of its continuous miner, which was being repaired in South Africa, in August last year as it gears for underground mining. The continuous miner – which accounts for 45 percent of underground mining activities – had broken down back in 2014. When operating optimally, a continuous miner processes about five tonnes of coal per minute. The coal miner paid a deposit of US$1 million for repairs on the continuous miner to start.

The payment came after the coal miner had secured a $3,2 million loan from some international financial institution to repair key equipment.

Last year, Hwange said it required about $6 million to repair all its equipment. Underground mining helps HCCL to produce high value coking coal, making it a good addition to the company's product mix and consequently volumes and profitability.