Hwange Colliery seeks to fully implement Scheme of Reconstruction

HWANGE Colliery Company Limited (HCCL), which is under reconstruction, expects to continue with the implementation of the Scheme of Reconstruction, focused on re-building the coal giant to restore lost value in the context of established Strategic Business Units (SBUs).

All SBUs are tasked with establishing a sound unit economics model as this is the key to long term sustainability and profitability.

In the same vein, the SBUs shall be required to contribute meaningfully to the reduction of balance sheet pressures emanating from legacy debts.

The Government, which controls about 42 percent shareholding in HCCL, in 2022 placed the company under reconstruction for the second time in about two years to revive the Matabeleland North-based colliery company that for years has been limping financially.

Its placement under reconstruction means the firm remains suspended from the Zimbabwe Stock Exchange since 2018.

The company has been facing financial challenges over the last few years, resulting in profitability and production challenges.

The reconstruction plan, approved by Government in 2023, will see the company being split into separate entities — housing and estate; medical services and agriculture.

The placement of the company under reconstruction was second time in about two years after the High Court blocked the initial attempt in 2020, saying the decision by the Government would have created a “potentially unwholesome situation for Hwange”.

The country’s oldest coal mine chief executive officer, William Gambiza, said the firm is focused on re-building Hwange to restore lost value in the context of established SBUs.

“We have kicked off this year with an unwavering commitment to the continued implementation of the Scheme of Reconstruction, focused on re-building Hwange to restore lost value in the context of established SBUs.

“The SBUs shall be required to contribute meaningfully to the reduction of balance sheet pressures emanating from legacy debts,” said Gambiza.

Gambiza said the coal entity is committed to key priority areas of the Business Improvement Programme namely ESG and Sustainability, market growth and customer value, corporate growth, operational efficiency and financial stability, digitalisation and automation, human capital and talent management.

Added to that, supply chain management, corporate branding, strategic partnerships and stakeholder management are other key areas.

He indicated that in fast-paced and highly competitive business environment, corporate branding has emerged as a crucial matter across companies.

Therefore, he said a well-crafted brand strategy and effective brand management practices can propel HCCL Holdings to new heights, creating a solid and enduring connection with customers to foster brand loyalty, differentiation and long-term profitability.

Sales growth, asset management and cost management remain key value drivers for our companies.

“In 2025, all SBUs need to establish a sound unit economics model as this is the key to long term sustainability and profitability across all the SBUs.”

Another key focus area will be the commissioning of the ZimHwange Coal Company underground mine (3-Main North) Joint venture in the first quarter while the much-anticipated commissioning of the coke oven battery is also set to take place in the same period.

“In 2025 we will also witness the creation of two new Joint Ventures, one for number 3 underground pillars and another for Chaba West underground coal mine.

“The JVs will be structured in a manner that unlocks anticipated synergistic benefits namely revenue, costs and financial synergies.

“Management is also working on continually unlocking value embedded in our real estate portfolio through implementation of sound investment strategies for the Hwange Property Company (HPC),” said the CEO.

He further noted that the SBU Hwange Lubimbi Energy Company (HLEC), will advance the energy assets through exploration drilling and technical studies. The energy company will also embark on the provision of domestic and commercial solar solutions in the region.-ebsienessweekl