COAL miner Hwange Colliery Company (HCCL) lost $8,6 billion for the year ended December 31, 2022 due to exchange rate volatilities which affected the business’ historical obligations.
According to the corporation, which is still under administration, legacy debts were responsible for $30,70 billion in unrealised losses in inflation-adjusted dollars as of the end of the year.
The country has seen high exchange rate volatility in the latter half of 2022 and the beginning of 2023.
“Revenue improved by 139,76% from $32,42 billion in 2021 to $77,73 billion in 2022 on an inflation adjusted basis. This was largely driven by the increase in sales tonnes,” HCCL administrator Munashe Shava said in a statement accompanying the firm’s financial results.
Gross profit increased by 226,20% to $23,16 billion in inflation-adjusted terms this year.
As a result, the company posted a loss of $8,6 billion for the year.
“The loss was mostly attributed to exchange rate impact on legacy debts. Legacy debts contributed $30,70 billion of unrealised losses in inflation adjusted terms,” he said.
Coal production increased by 63%, while sales volumes increased by 45% compared to the prior year.
Despite the remarkable increase in production and sales during the period, the company said the underground mine section was affected by delays in the commissioning of new equipment, while the market for nuts, peas, and duff products was depressed.
However, the company says to increase production, it had entered into an equipment mobilisation and coal off-take agreement for new underground mining equipment valued at US$15 million over a period of two years.
“A consignment of the equipment worth US$6 million has since been received and commissioned into operation. This is expected to increase underground production to 50 000 tonnes by mid-2023. The company has also engaged new mining contractors to open three new opencast pits to guarantee coking coal annual production of 772 000 tonnes per year,” Shava said.
On the coal processing front, the company acquired two new washing plants that will be commissioned during the second half of 2023.
The washing plants are expected to be located near the mining areas to reduce hauling and processing costs.
“The development of the Option Area has started with the boxcut and mining of a portal that will lead to the underground mine. This new mine will augment the production of coking coal from the current 3 Main underground mines. Coal production from the Option Area is scheduled for 2024.
“The company has a thrust in 2023 to grow its market share of coking coal sales in neighbouring countries. Advanced plans to develop dedicated solutions for the delivery of coking coal and coke products in the region are underway,” Shava added.
During the period, gross profit increased by 226,20% from $7,10 billion prior year to $23,16 billion in inflation-adjusted terms. – (Newsday)