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WORKERS at troubled coal miner, Hwange Colliery Company Limited (HCCL) have not yet received their salaries this year, extending the company’s indebtedness to its restive workforce. Sources said the situation for workers at the colliery was dire, suggesting that employees could resort to the courts to force HCCL to pay. That would certainly compound the company’s woes, as it already owes the workers over US$14 million and has a debt of US$160 million.

A worker told the Financial Gazette on condition of anonymity that they had toiled for nothing this year. Management has failed to give any assurances that they would receive their salaries soon. “To tell you the truth, we are yet to receive our salaries for this year,” said the worker.

He indicated that they had been getting trifles this year as part payment for what they were owed from last year. “Just this month, we were given US$200 each which is part of our December 2013 salaries to just cushion us. Things are so bad for us and the management does not even bother to explain what is really happening at the company,” said the worker.

HCCL is in a precarious financial situation as indicated by its latest results, which showed that current liabilities soared to US$173 million from US$126 million in June last year, against declining total assets valued of US$87,9 million from US$101 million.

Disgruntled workers said it was clear they were heading for a bleak Christmas, adding it would be foolhardy of them to expect bonuses considering they were owed huge sums of cash by the company which have not yet been settled. HCCL corporate affairs aisor, Burzil Dube, could neither deny nor confirm the development. He requested questions in writing, but had not yet responded to these at the time of going to press.

In May this year HCCL wanted to retrench half of its workforce, but the government intervened and ordered the company to find other ways of reviving the company. The company’s operations supports 3 200 workers and a community of 55 000 people. Apparently, HCCL is trying to rescue its operations from collapse and has contracted a Portuguese mining and construction firm, Mota-Engil, to mine its coal claims under a US$260 million deal agreed nearly a year ago.

Mota-Engil, which started the mining operations in August, was awarded the contract to mine coal on behalf of HCCL at Chaba open cast mine in December 2013 following the end of a similar deal with Billy Rautenbach’s Clidder Minerals. The contract runs for the next five years, a development which is expected to turn around the fortunes of the resources giant which has a multiple listing on the Zimbabwe, Johannesburg and London stock markets.

The contract includes drilling works, detonation, loading and transportation of coal from the Colliery’s Chaba open cast mine to various processing plants while HCCL which has been incapacitated in terms of equipment will source for the market to sell the coal. The company will run its business and independent of HCCL operations, a move which is expected to see production at the colliery increasing to about 500 000 tonnes per month by the end of this year from the current 150 000 tonnes.

Recently, HCCL also sealed a US$11 million loan deal with Export-Import (EXIM) Bank of India for the purchase of more plant and machinery and on the back of this capital injection the coal miner is expected to produce about 300 000 tonnes of coal monthly while the contractor Mota-Engil is to produce about 200 000 tonnes of coal monthly to achieve the targeted 500 000 tonnes per month.

The company has also finalised the acquisition of loading and drilling equipment worth US$15 million from BEML of India, which will be financed through a loan structure from EXIM Bank of India. Additional equipment worth US$18 million, which will be financed through a loan from PTA Bank, has also been acquired from BELAZ of Belarus, the world’s third largest dump truck manufacturer.

HCCL is expected to increase production to over half a million tonnes of coal per month by the end of the year. HCCL, which used to enjoy a monopoly in coal production, has come under pressure from new producers, Makomo Resources, Coal Brick and Chilota Colliery, who have chipped off its market share, threatening to eclipse the oldest producer in output if current trends continue.

Between January and December last year, Zimbabwe’s coal miners, mainly HCCL and Makomo Resources, produced 4,5 million tonnes, according to figures released by the Chamber of Mines. This is significantly lower than HCCL’s installed annual capacity of five million tonnes.

Source : Financial Gazette