Hwange floats open cast mining tender


HWANGE Colliery Company (HCC) Limited has floated a tender for a contractor as it moves to expand its mining operations to ramp up production volumes and improve capacity.


In a tender notice yesterday, HCC said it was inviting bidders for the provision of contract mining services at its Chaba Mine, adding that prospective bidders should have the capacity to mine a minimum of 800 000 bank cubic metres per month.

“Tenders are invited for the (above) work which will include open cast mining sequence of bush clearing, drilling and blasting, overburden mining and the blasting of coal and coal mining,” part of the notice reads.

In the notice, Hwange said all ancillary activities, including haulage road maintenance and dust suppression would be conducted by the contractor.

In addition, bidders should also indicate a separate capacity to commission in-pit coal dry screening and crushing plants to process a minimum of 200 000 tonnes of coal per month.

According to the notice, tender submissions are to be hand delivered by not late than October 31 2013.

Hwange is in the doldrums and has been struggling to pay workers’ salaries for the past eight months.

The company recorded $3,2 million after-tax losses in the first half of the year attributed to a poor cashflow and high legacy debts.

HCC has debts in excess of $140 million which resulted in finance costs increasing to $1,1 million from $0,9 million in first half of the year due to penalty rates on overdue borrowings.

Cashflow was strained on higher working capital requirements and cash generated from operations turned negative.

Sales revenue for the six months was down to $40,4 million from $51,8 million.

Coal sales during the period under review amounted to 913 440 tonnes down from 918 491, while coke sales volumes declined to 25 839 tonnes from 68 336.

Deliveries to Hwange Power Station at 580 818 tonnes were 56% above the 373 126 tonnes supplied during the same period last year.

The company attributed the poor performance to an increase in overhead costs against stagnant production volumes coupled with static prices of coal as well as frequent breakdowns of aged equipment.

In an effort to boost production, the company had embarked on a number of recapitalisation initiatives that were expected to result in improved production performance.

The company recently purchased mining equipment worth $11 million from Sany Heavy Equipment Company Limited of China as part of the recapitalisation initiative.

According to management another initiative of procuring drilling equipment from South Africa is at an advanced stage and is expected to be delivered before the end of year.

Local demand for coal is expected to increase as the economy continues to recover.

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