Hwange challenges mounts as government withdraws support

Embattled coal mining giant faces a myriad of challenges amid allegations of capture and abuse of  funds earmarked for mine development. Management at Hwange Colliery is alleged to have abused funds which were supposed to pay for the development of western areas concession subsequently prompting Government not renewing the grant, according to one of its Director.

Presenting oral evidence to the Portfolio Committee of Mines and Mining Development, Mr Tome said the withdrawal by Government to support the project will impact negatively on the country’s power supply.

“We applied for another concession of which we have paid concession fees over years and management was tasked to fully pay the concession fees called special grant fees with money that was supposed to have come from western areas account but some directors decided to only partly pay it for reasons best known to themselves.

Consequently Mines and Mineral Minister has written to the Company advising that the special grants cannot be renewed as it was unsuccessful

Mr Tome said when Zimbabwe started experiencing acute power shortages, the Government in its wisdom saw it fit to expand  power generation assets which then culminated in the expansion of Kariba and in turn, the expansion of Hwange.

Mr Tome also said this prompted the licensing of private power producers across the country, especially in the hydro and solar sectors.

“Hwange at that time was the sole supplier of thermal coal to Zimbabwe Power Company and power from Hwange is still produced in single digits which is then blended with power from hydro at Kariba to keep our tariffs at bare minimum.

“So if Hwange does not have a concession to guarantee coal offtake to ZPC come the first quarter of 2020 when it is envisaged to start firing the nation will be jeopardised in terms of power supply.

“We have banked our plans as Hwange on the Western areas concession and this is why we have reinvested the funds so that work could have started a year ago but we had serious issues with our management and work was not starting frustrating the Board despite the availability of funds,” said Mr Tome.

He said the Board were getting flimsy reasons from time to time which is the reason they had to deal with management from time to time and this has continued to date with even a deeper issue of embezzling funds which were meant for a strategic concession.

“But the biggest blow has come from the Ministry of Mines and Minerals that they are no longer going to renew the special concession grant.

“So we don’t know what will that mean to the generation of power at Hwange thermal power station when it kicks on live. It was also in our strategic plans that we start working on the concession now and develop it into a mine so that when coal is needed we guarantee the coal for power generation.

“When we discovered that our management was sabotaging the Company and the Board we then took it upon ourselves to go round and assist management to go round in quoting investors who may want to come and invest in Hwange,” he said adding that they found out that its western areas concession were running out and at the current mining rates will last 5-6 year for the open pit and for the underground mining will last about 25 years.

– Equity Axis News

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