AfricaBusiness & FinanceZimbabwe

Covid-19 slows Zimbabwe’s coal firm Hwange efforts to earn Forex

By Almot Maqolo

Zimbabwe’s Hwange Colliery Company says it is currently on an export drive to improve export earnings into the regional markets and is engaging logistical partners to ensure smooth movement of the coal.

Hwange, in which Zimbabwe’s government is the biggest shareholder with a 37 percent stake, is the nation’s second-largest coal producer and supplies coke to state-owned electricity generating firm Zimbabwe Power Company. Troubled miner, which was placed under administration in 2018, moved from a loss of ZWL$487 million registered in 2018 to register a profit of ZWL$1.5 billion in 2019.

In a trading update, Hwange said it has obsolete and redundant machinery owing to insufficient foreign currency as a result of low retention and low export volumes as well as poor inter-bank Forex availability. The company is targeting regional markets such as Zambia, DRC, Malawi, Mozambique, Botswana and South Africa and must overcome poor logistics to benefit from these markets,” it said.

Engagements with key logistical partners such as BBR, NRZ and ZRL are on-going to ensure the whole value chain is smoothed and that HCCL coal remains competitive on the export market. However, the miner said covid-19 pandemic has “slowed down the efforts” as almost all countries imposed restrictions on cross border movements.

In spite of the challenging operating environment, HCCL’s production volumes rose 50% to 175 849 tonnes in Q1 2020 from 117 165 in the comparative period. Revenue increased by 860%. But, sales volumes fell by 33%. Gross profit went up by 22% while net loss declined by 65% compared to prior period.

In the outlook, the miner said it will continue to anticipate improvement of sales as most of its clients have reopened pursuant to the lockdown moving to Level 2.

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