Justice Legal and Parliamentary Affairs Minister Ziyambi Ziyambi says he acted within the confines of the law when he removed Bekithemba Moyo from running the affairs of resources firm, Hwange Colliery Company Limited (HCCL).
Moyo’s contract as administrator was terminated in October last year after a 2-year stint despite steering the resources firm into profitability from perennial losses.
He was replaced by Grindale Engineering executive director Dale Sibanda.
Sibanda is being assisted by Munashe Shava, Great Dyke Investments COO and Mutsa Jean Remba, the managing partner of Dube, Manikai and Hwacha.
Ziyambi said the Act allowed him to terminate Moyo’s contract.
“…..The Act allows it [termination of the administrator’s contract] and just like me as a Minister I serve at the pleasure of the appointing authority. Go and read the Act. There is no reason why there should be an issue on why the contract was cancelled because the law allows it,” Ziyambi said.
In 2018, government placed HCCL under administration in terms of Section 4 of the Reconstruction of State-Indebted Insolvent Companies Act (Chapter 24:27) (No.27 of 2004) to allow it to recover and potentially return to profitability.
In its financial results for the six months to June 2020, HCCL delivered an improved performance.
The miner reported an inflation adjusted profit after tax of ZWL$577m in the reviewed period from a net loss of ZWL$2.3m in prior comparative period.
However, due to exchange control loss of ZWL$1bn on legacy foreign creditors, HCCL had a net loss position of ZWL$992m in the reviewed period from a net profit of ZWL$3.5m reported in the same period in 2019.
Legacy debts stood at US$20m. HCCL said the problem will persist until the blocked funds are settled.
Revenue for the company increased 28% to ZWL$1bn during the reviewed period from ZWL$827m.
This was attributed to an increase in high value coking coal sales as well as frequent adjustment to product prices in line with changes to the interbank rates.
HCCL’s total assets stood at ZWL$7.7bn from ZWL$2.7bn in 2019.
Total production increased 84% to 596 876 tonnes during the period under review from 325 114 tonnes in prior comparative period. This was attributed to increase in production by the contractor.
But, HCCL is now pushing for its own mining in order to realise more revenue. It plans to spend US$17 million towards recapitalisation to push its own mining.
HCCL is targeting to produce 200 000 tonnes a month to have sustainable business. BusinessTimes