ZIMBABWE Stock Exchange (ZSE) listed coal producer, Hwange Colliery Company, says it expects to produce 200 000 tonnes of coal per month driven by improved performance and funding support from local banks and regional financiers.
Dr Charles Zinyemba, the company’s managing director in a statement of financials for the half year ended 30 June 2021, said it has been challenging to obtain both working capital and long term financing for the business.
“It is, however, pleasing to note that as the company’s performance continues to improve, funding support in the form of lines of credit to the business from local banks and regional financiers has likewise been established,” he said.
During the period under review, the company’s production increased by 51 percent following challenges of foreign currency to import spares and consumables to help in the production.
“The sales volumes, however, increased by only 23.7 percent compared to 2020 mainly as a result of the influence of Covid-19 on the market logistics, as well as the reduced thermal cost off take,” Dr Zinyemba said.
Hwange’s revenue increased by 38 percent to $3, 03 billion for the half year period driven by increased high coking coal sales and price adjustments in the market.
‘During the period under review, focus was on increasing production and sales of high value coking coal,” he said.
Dr Zinyemba said the company’s sales volumes rose by 23.7 percent due to the reduced thermal coal off take and the impact of Covid-19 on the market.
He noted that the company’s profit stood at $538, 76million in historical terms down from $991, 71million in the same period last year following the $285, 05 exchange loss on foreign currency.
Coking coal sales increased by 28.6 percent to 52 793 tonnes compared to 41 053 tonnes of the prior year, and Dr Zinyemba noted that the coking coal sales were however limited by washing capacity constraints.
Open cast mining recorded a 55.59 percent increase in production resulting in 806 404 tonnes produced following the delivery of 305 679 tonnes of coal to Hwange Power Station which is a 14.03 percent increase from the previous year.
The 3 Main underground was 19.41 percent higher than the previous year as a result of improved operational funding and credit facility provided by the major equipment manufacturer.
Hwange Colliery’s assets stood at 16, 26 billion down from 16, 76 billion in the prior year.