Miner adopts five year strategic plan aimed at increasing production

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    Harare – The country’s major coal producer Hwange Colliery Company Limited which resumed operations in January this year, says it is looking at increasing production from its underground mines after adopting a five year strategic plan.

    The miner said the five year strategic plan aimed at increased and least cost production was a culmination of a company-wide approach involving and incorporating inputs from staff in all departments.

    Hwange, the country’s largest coal miner halted underground mining operations in 2015 after the key equipment provider, Continuous Miner (CM), which accounts for almost half of production, broke down. The CM is a coal extraction machine, which works with auxiliary equipment during production.

    At present, Hwange is extracting coal at its open cast pits with much of the output produced by contractor, Mota Engil. Coal produced from the underground pits is largely used for power generation and industrial purposes.

    In a statement accompanying the company’s financial results for the half year ended June 30, 2018, Acting Managing Director Shepard Manamike said open pit mining increased from an average of 68,986 metric tonnes per month in the first quarter and peaked at 300 000 metric tonnes per month in June.

    He said the increased production and sales enabled the company to retain key customers and grow its market share locally.

    “Sales for the half year ended 30 June 2018 were 0.68 million metric tonnes which represented a 51 percent increase compared to the same period last year.

    “Thermal coal still contributed the largest portion of sales while industrial coal sales to the industrial customers and the tobacco sector also grew.

    “Coking coal sales will be a major area of focus and growth as the production from 3 Main underground increases. The ultimate strategy will be coke production which is hinged on the Company’s resuscitation of its own coke oven battery.”

    In export sales, Manamike said the Company’s largest export market was Zambia.

    He said export of industrial coal and coke to this market contributed to the export revenue.

    “Trial orders of industrial coal to new blue chip customers in Zambia and South Africa were also undertaken. These new customers will be a source of market share growth for the export business. Export sales only contributed only 5 percent compared to the target of 20 percent contribution,” he said adding that refurbishment of the Hwange Colliery coke oven battery is planned to start in the 4th quarter of 2018.

    In its Estate division, Manamike said revenue for the period under review grew by 62 percent to $4.9 million compared to the previous year.

    “The revenue was generated from the following segments: real estate (56%), retail (29%), hospitality (8%) and education (7%)”

    He said the Medical Services Division generated revenue of $986,522 in the period under review.

    “Service provision has improved significantly due to improved cash flows after the introduction of an externally managed medical aid.”

    Going forward, Manamike said the operating plan for the second half of the year (H2, 2018) will continue to focus on increased production and improved efficiencies.

    However, he noted that increased production requires that the Company allocates more funding to its operations which means that it will have to focus on its core business of mining and reduce non-mining costs in line with industry best practises.

    Additionally, he said innovative ways to deal with the scheme obligations will be explored while production of high margin and value coking coal will be increased.

    – Equity Axis News

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