Home » Legal and Judicial Affairs » ZIMBABWEAN COAL MINING FIRM PROPOSES TO SELL MINING TOWN TO CLEAR DEBTS

HARERE-- Zimbabwean coal mining firm Hwange Colliery Company (HCCL) plans to sell off the local town of the same name for 300 million US dollars to raise money to clear debts owed to workers and several other creditors, a senior company official says.

Hwange is one of the oldest towns in Zimbabwe having originated from settler mining activities and whose growth has generally been driven by coal mining. With the population growth, it has become a major district centre performing regional functions which of an administrative and commercial nature. It now boasts the biggest thermal power station in the country, the Hwange Power Station.

However, Hwange town has been a source of battle over the years between HCCL and the Hwange Local Board (HLB), which was created by the Urban Councils Act in 1974. As a result of multiple administration and land ownership by the three parastatals in Hwange -- HCCL, National Railways of Zimbabwe (NRZ) and Zimbabwe Power Company (ZPC) -- the local authority only administers and offers service provision to two suburbs, Mpumalanga and Baobab.

The board has been calling for amalgamation of all the concessions into one with it overseeing infrastructural development projects, administration and service provision, but HCCL has rejected the idea.

HCCL board member, Ntombizodwa Masuku has told the Parliamentary Committee on Mines and Energy that its workers alone are owed 70 million USD. To retire our debt to the workers, trade creditors and even government, we have a plan to sell the town to the tune of 300 million USD, she said here Monday.

Masuku said the company was also planning to sell some of the houses that it owns. The company is in possession of 5,000 houses which we may not need for all the workers we have. Some of these houses are occupied by our ex-workers so we are engaging our shareholders to have the town sold also that will allow the company to focus on its core business which is

mining, she said.

Masuku said workers would be given an opportunity to purchase some of the houses to retire their debts. The company was also considering retrenching to reduce its financial burden by lowering its wage bill which currently stands at 1.8 million USD per month.

The company currently employs 2,045 workers against a requirement of only 1,000 based on current production levels.

In order to lower the wage bill, the company had also introduced a new working calendar for workers. We have introduced a two-weeks-in, two-weeks-out regime, said Masuku.

She said the company was facing several operational challenges, and required at least 500 million USD in fresh capital to boost operations. We are not breaking even, and also we have been mining low value products and now the thrust is to move to high value products, she said.

Source: NAM NEWS NETWORK

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