Coal miner Hwange Colliery Company (HCC) says it has established funding support for the business from local banks and regional financiers to bolster its operations despite being under administration.
A lot of work has gone into stabilisation of the business, the company said in a statement to shareholders.
“With the Company being under reconstruction, 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.
“As a result, the operations are expected to stabilise within the next 6 to 12 months. The immediate target is to consistently produce at least 200 000 tonnes a month,” it said.
The company’s production rose 51% during the first half of 2021, with the main challenges having been foreign currency to import spares and consumables. The sales volumes however surged by only 23.7% compared to 2020 mainly as a result of the influence of Covid-19 on the market and logistics, as well as the reduced thermal coal offtake.
HCC targets to increase coking coal production and sales which will in turn increase capacity to discharge obligations to creditors as well as create a positive balance sheet in the medium term.
In the first half of 2021, inflation adjusted revenue for coal increased by 38% to ZWL$3.03 billion from ZWL$2.19 billion in the comparative period. This was attributed to a combination of an increase in high value coking coal sales and regular product price adjustments in line with market value.
Net loss for the period under review decreased from ZWL$991.75 million to ZWL$538.76 million in historical terms. The net loss was a result of ZWL$258.05 million exchange loss on foreign legacy debts and deferred tax of ZWL$441.15 million during the period under review – Harare