Harare, Zimbabwe — 02 July 2013 – Hwange Colliery Company Limited in Zimbabwe is about to go through a major facelift with the acquisition of mining equipment worth US$27 million in two deals with a leading Chinese company.
Acting Hwange managing director Stanford Ndlovu told shareholders that a deposit of US$2.2 million had been made to the Sany Heavy Equipment Corporation (SHEC), and added that the delivery of the equipment was expected at the end of next month, reports allAfrica.com.
“A total of 13 pieces of heavy-duty mining equipment is currently being shipped from China and will be commissioned at the mine by the end of July 2013,” he said.
“The company is executing the acquisition of drilling equipment worth US$5 million from other overseas suppliers. Procurement of additional mining equipment from China North Industries Corporation and XCMG, totalling US$22 million, is being executed and delivery is expected before the end of the year.”
An earlier management announcement said the equipment would ensure the company could double its production to 4Mtpa.
Ndlovu pointed out that last year the company sold 2Mt of coal and coke, down from 2.5Mt a year ago.
Production had been mainly affected by equipment inefficiencies, he emphasised. Total coal sold was 1.68Mt, down from 2.4Mt a year earlier, while coke sales rose to 228,201t from 74,877t.
Hwange power station accounted for 54% of the coal sold in 2012. Exports rose by 28% from 203,096t to 260,803t. Hwange’s main export markets include Zambia, the Democratic Republic of Congo (DRC) and South Africa.
Revenue for the period fell to US$104.2 million from US$107.8 million in 2011. Export revenue of US$26.1 million accounted for 25% of the total turnover, compared with US$13.4 million, equivalent to 12%, a year earlier.
A company announcement said export revenues were expected to continue rising, given the anticipated increase in production volumes after the delivery of the new equipment.
Operating profit was up 73% from US$4.1 million a year ago to US$7.1 million. Administrative costs were down US$27.5 million from US$31.2 million in 2011, and borrowings amounted to US$31,6 million.
Giving a trading update for the five months to May 2013, Ndlovu said the company’s performance was “fairly satisfactory” and that it was on course to meet its production target for 2013.
Source: allAfrica.com. For more information, click here.