HWANGE PROJECT GIJIMA 2 TO BOOST EXPORTS | After successfully launching Project Gijima – a rapid results initiative – Hwange Colliery Company Limited (HCCL), is banking on Project Gijima 2 to boost its export sales through selling of underground coal and coking coal to other countries in an effort to earn more foreign currency.
Hwange, which is expected to reach 400 000 tonnes monthly production by December, is now pushing for an increase in export sales to earn the much needed foreign exchange for the coal miner to expand its operations.
Though the company is in an arrangement with both local and international banks to raise around $400 million for the company’s total operations, Hwange intends to produce abundant coal and coking coal to earn forex. HCCL managing director Engineer Thomas Makore, recently told The Herald Business that the resumption of underground mining at Project Gijima 2 will finance some of the company’s projects to retool its operations with modern and more efficient equipment and technologies, through selling of some of its produce to South Africa and other nations. He said Gijima 1’s main focus on its 100 Day Rapid Results project, was mainly production and productivity improvement but Gijima 2’s focus will be exports among other things.
“Given the success of the Project Gijima, we launched Project Gijima 2 which will mainly focus on export sales, safety, equipment availability, processing throughput, quality and deliveries to customers. Our goal is to increase the contribution of export revenues from the sales of coking coal and industrial coal. The rest of the underground mining equipment needs foreign payments. We are working with our banks to mobilise the required foreign currency so that the rest of the equipment is delivered.
“By the end of the year, we expect to have resumed underground mining operations. But more importantly, we need some of our projects to earn forex through robust exports sales as we can’t afford accruing more loans when we can fund our projects through these projects,” said Eng Makore. Project Gijima 1’s output rose to the current levels of 230 000 tonnes per month from 55 000 tonnes earlier this year.
Hwange intended to rebalance the mix of thermal, industrial and coking coal so that it maximises its profitability. The company will also be commencing exploration and drilling of the Western Areas coal concession in the last quarter. The company is firmly on track in its turnaround journey as a raft of measures that have been put in place to turnaround the organisation continue to bear positive outcomes.
Government came up with the Scheme of Arrangement to deal with legacy debts of around $350 million which were threatening to choke Hwange’s turnaround strategy.
The company also entered into two 25 year coal supply agreements, one with Zimbabwe Power Company and the other with Per Lusulu power, an independent power producer in Matabeleland North. These off takes form an anchor to the company’s sustained turnaround strategies and therefore we are confident Hwange Colliery’s future looks bright.
The company looks set to bounce back to its blue chip status through teamwork determination, focus and hard work.