Harare, Zimbabwe — 14 November 2012 – Hwange Colliery Company in Zimbabwe has sealed a US$22 million supply credit deal with a Chinese mining equipment company Norinco.
allAfrica.com reports that this follows an invitation of bids by the Zimbabwean coal mining giant in April this year for supply of a wide range of equipment after the company failed to raise funds for recapitalisation.
Under the supply credit arrangement, Hwange intends to acquire equipment worth US$40 million for underground and open cast mines and for a coal preparation plant, said chairman Farai Mutamangira. Hwange will make a down payment of US$6,6 million to Norinco before the end of this month with equipment deliveries expected during the first quarter next year.
The equipment includes caterpillars, bulldozers, excavators, fire tender vehicles and dump trucks. After commissioning, production is expected to double to 450 000tpm.
“This is a positive development for the company and the whole nation at large,” said Mutamangira in an interview. He added that this was in line with the Hwange board’s overall thrust to ensure the company is fully recapitalised. Over the past two years, Hwange has been pursuing a loan from the Development Bank of Southern African, but was unsuccessful.
Mutamangira, Hwange acting managing director Stanford Ndlovu and company secretary Tembelani Ncube were in China last week when the deal was sealed. Asked if Hwange would be able to raise the deposit on time, the chairman said “certainly.”
Meanwhile electricity supplies are set to improve after Hwange recently commissioned equipment worth US$6.3 million which will result in uninterrupted supplies of coal to small thermal power stations in Harare, Munyati and Bulawayo.
Hwange, which has an installed capacity to produce 5mtpa of coal, has been operating below capacity due to dependence on old equipment. It requires more than US$175 million for recapitalisation.
Source: allAfrica.com. For more information, click here.