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Hwange Colliery slowly losing mining rights

By Business Reporter – Monday 6 January 2020

HARARE (Mining Index) – HWANGE Colliery Company Limited (HCCL) is allegedly not reaping the full benefits from its vast coal concessions due to financial constraints, operational inefficiencies and supposed invasions of its concessions by various interested third parties.

Sources close to Mining Index revealed that various local and foreign interested parties are allegedly mining within the Hwange Colliery concession leaving the coal miner with just a strip to extract the mineral.

All has not been well with HCCL, with the Colliery recording consecutive annual losses in recent years.

While HCCL has been struggling to meet operational expenses and failing to remunerate its workers for a period of up to three years, who actually is mining at the Colliery?

Information gleaned by Mining Index reveals (HCCL) is slowly losing its coal mining rights as third parties have reportedly acquired a greater part of the coal miner’s claims.

A top civil engineering company, R. Davis & Co. has been cited to have started coal mining operations at Hwange.

“A recent development is that R Davis is already mining on the Hwange Western area,” said a source who requested anonymity.

R. Davies & Co.’s core business sector has been chrome and gold open cast mining with recent contracts at Ashanti Mine in Bindura and Ngezi chrome mine.

Controversial businessman Billy Rautenbach is also alleged to be mining on a portion belonging to HCCL.

In April 2014, former chairperson of the parliamentary committee on mines Temba Mliswa said Rautenbach got a Hwange coal claim after pledging to government to improve power generation by supplying coking coal.

Rautenbach’s mining history stretches back to 2006 when he was involved in Central African Mining and Exploration Company (CAMEC). He also acquired various mining operations in the Democratic Republic of Congo (DRC).

Chinese miners have also been spotted mining coal and constructing coke ovens at Hwange.

“It is the community’s observation that the Chinese community is moving at an alarming pace taking most of Hwange area’s mining opportunities that is from coke oven batteries to the mining itself,”  he said.

Chinese firms namely Tutu Investments, Zimbabwe Zinghxon Coking Company (ZZCC) and South Mining have also set up coal mining operations in Hwange.

Hwange is not only rich in coal but is endowed with coal Bed Methane (CBM) reserves.

HCCL holds a special grants licence to explore for coal in Lubimbi West (SG4764) and to explore for coal and coalbed methane in Lubimbi East (SG4364).

In presenting the 2020 national budget, Finance and Economic Development minister Mthuli Ncube spoke of various interventions on improving production and transparency in the mining sector including full capacitation of HCCL to increase throughput from underground mine.

According to a 2019 half year interim report released by HCCL acting Managing Director Dr. C. Zinyemba, open pit mining averaged 32,073 metric tonnes whilst underground mining recorded 21,000 metric tonnes per month.

Hwange was in 2018 projected to produce 50 000 tonnes of coal per month, against a production capacity of 200 000 tonnes per month.

In May 2018, former Hwange Colliery managing director, Thomas Makore was suspended on various allegations including corruption.

HCCL has seen successive boards coming up with revival strategies, but not a single one has been successful.

In Jun e 2018, Mines and Mining Development minister Winston Chitando appointed Allan Mashingaidze, Anna Kunda, Flora Ngwenya, Edward Mazoredze, Roger Williams and Valentine Vera to the Hwange board to turn around the coal miner’s fortunes. However, the impact of the current board is yet to be established.

HCCL was placed under reconstruction in October last year after it emerged the coal miner had become technically insolvent.  Saddled with a legacy debt amounting to US$150 million, whose liabilities outstrip the value of its assets, Bekithemba Moyo was then appointed as Administrator to set the Colliery on the course to profitability.

Two months later, British businessman Nicholas van Hoogstraten cited corruption and financial mismanagement as key elements owing to the demise of the Colliery.

Van Hoogstraten, holds 31 percent shareholding in Hwange, government 37,1 percent,  Messina Investments 16,76 percent, Meikles Steel 9,76 percent, London Register 66,87 percent,  National Social Security Authority (NSSA) 6,45 percent, Hamilton and Hamilton Trust 4,9 percent, Local Authorities and Pension Funds 1,2 percent. ENDS//

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