eBusiness Weekly
Business Writer
Hwange Colliery Company Limited (HCCL), Zimbabwe’s coal mining giant, has suspended underground mining for the next six months.
The decision comes after the company stockpiled a significant amount of coal, with sales failing to keep pace with the recent surge in production.
The surge in coal production is attributed to the acquisition of new, efficient machinery in the first quarter of 2023.
The improved production capacity, allowing the company to mine 989 503 tonnes – again, nearly double the previous year’s figures.
Hwange, which is partly owned by Government is currently under reconstruction.
“The company aims to stop underground mine production for the next six months to stop losing mined coal through spontaneous combustion as production is way more than sales,” administrator Munashe Shava said in a trading update for the third quarter of 2023.
“The quantity of mined coal is deemed sufficient to meet the operating needs of the company.”
Hwange said sales for the third quarter rose to 911 245 tonnes of coal, nearly double the volume sold in the same period last year of 388 487 tonnes.
Hwange Colliery saw a shift in the types of coal sold as well. Hwange Power Station coal sales increased significantly, accounting for 48 percent of total sales compared to just 7 percent in Q3 2022.
Raw coal sales also grew, making up 39 percent of the total, up from 55 percent. Conversely, sales of coking coal and industrial coal decreased, representing 1 percent and 12 percent of sales respectively. Contaminated coal sales also dropped to 8 143 tonnes from 25 309 tonnes in the previous year.
According to Hwange, the trend reflects a growing demand for power station coal, potentially due to increased power generation needs in the country.
Looking at the bigger picture, Hwange Colliery’s sales for the first nine months of 2023 have skyrocketed to 2,8 million, a 163 percent increase compared to the same period in 2022 (one million tonnes).
The mining division emerged as the strongest performer, contributing 96 percent of the company’s revenue, up from 91 percent the previous year. The estates and medical divisions saw their contributions to revenue decline slightly.
