Hwange Colliery Company Limited has coincided two consecutive losses in two years despite being awarded three new coal special grants by the government in 2015.
The company got more than US$100 million(115 056 773) loss after taxation in 2015 and US$89 million (89 909 990) loss after profit last year according to its 2016 annual report.
“As described in notes 34.1 and 34.2 to these financial statements, the company incurred a loss for the year of USD89 909 990 (2015: USD115 056 773) and, as at 31 December 2016, the Company’s total liabilities exceeded its total assets by USD167 744 222(2015: USD77 834 232).’ – Grant Thornton audit report for the Colliery company.
Last year, the treasury stated that Hwange colliary, which is the largest producer of coal was overstaffed by at least 2 400 people and needed only 800 workers to operate according to allafrica.com.
“The three new special grants are Western areas (SG 5950), Lubimbi West (SG 4764) and Lubimbi East (SG 4364). The three new special grants which all sit in coal prospective areas are 9 648, 10 995 and 4 200 hectares respectively,” the company’s annual report states .
During last year’s mid-term policy review , Zimbabwe’s Finance Minister, Patrick Chinamasa said Hwange Colliary had to get rid of the majority of workers which it owed US$45 million by then.
” As at 31 December 2016, loans payable within one year amounted to USD 12.4 million (USD4m in 2015). The increase is attributed to the matured portion of the long term loans in the of US$9.8 million ready for payment during the year,” states the Director’s report.
However, the Hwange Colliery Management team said that its investors were happy with its turn around strategy where it is expecting to increase production during the Annual General meeting done today.
“The Company has not been able to settle some of the obligations in respect of those cases for which judgements were passed against it by the courts.” – Grant Thornton , independent auditor’s report.
The management team told the media that it produced 230 thousand tonnes in June which was more than its last average of 80 thousand tonnes.
Hwange Colliery Company Limited, which also supplies Hwange Power Station, has got markets in Zimbabwe, South Africa, Namibia, Zambia, Botswana, Malawi, Mozambique and DRC. The Zimbabwean Government owns the largest piece of shares in the Hwange Colliery Company Limited amounting to 36.77%.
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