BY MARLENY ARNOLDI
Johannesburg Stock Exchange and London Stock Exchange-listed Hwange Colliery has reported a 139 percent year-on-year increase in gross profit to $851 million in the six months ended June 30, partly owing to an increase in high-value coking coal sales.
The company has effectively narrowed its net loss to $538million, compared with a net loss of $991 million posted for the six months ended June 30, 2020.
The net loss position was as a result of an exchange loss on foreign legacy debts and deferred tax of $441 million, the company explains.
Hwange has thermal and coking coal mining and processing operations in Zimbabwe, but has been under administration as a result of a reconstruction order, issued by the country’s authorities, since October 2018.
The company’s production increased by 51 percent in the period under review, with the main challenges being around foreign currency to import spares and consumables.
Although coking coal sales increased by 28 percent year-on-year to 52 793 tonnes, sales volumes were limited by washing capacity constraints.
The company has since completed and commissioned a washing plant.
Total coal mined by the opencast operations was 806 404 tonnes – a 55 percent increase year-on-year – while underground coal production was 19 percent higher year-on-year.
Hwange explained in a results statement published on October 11 that a lot of work has gone into stabilising the business.
“With the company being under reconstruction, it has been challenging to obtain working capital and long-term financing.
“However, as our performance continues to improve, funding support in the form of lines of credit from local banks and regional financiers become possible.
“We expect our operations to stabilise within the next six to 12 months.
“The immediate target is to produce at least 200 000 tonnes a month, consistently.”
The company’s shares remain suspended on the Zimbabwe Stock Exchange owing to the reconstruction process. – Mining Weekly