Mining division drives Hwange’s profit growth
HWANGE Colliery Company Limited’s (HCCL) mining division driven by the mechanisation of the segment in the first quarter of the year 2023 was the most performing segment when compared to the Estate division and Medical Division, as the mining entity recorded a profit before tax of US$10,2 million in the third quarter that ended September 30, 2023.
In 2022, the coal firm indicated that to increase production, it had entered into an equipment mobilisation agreement for the Underground Mine, which will result in the company getting new underground mining equipment, valued at more than US$15 million in the next two years.
In the third quarter that ended September 30, 2023, the mining division contributed 96 percent of the company’s revenues, improving from the previous year of 91 percent.
The Estates Division had three percent, dropping down from eight percent during that same period and the Medical division remained stagnant at one percent.
Overall, the coal mining entity recorded a profit before tax of US$10,2 million in the period under review.
In a trading update for the quarter under review, the company’s administrator, Mr Munashe Shava said sales prices for coal dropped slightly for the quarter ended 30 September 2023.
The input costs remained relatively constant thereby affecting the profits for the company.
“However, the company performed fairly well during this quarter as unaudited profit before tax amounted to US$10,2m better than the previous years,” said Mr Shava.
Mr Shava noted that the company’s performance, which is still under reconstruction and remains suspended on the Zimbabwe Stock Exchange was fairly better as both production of 989 503 tonnes and sales of 911 245 tonnes were almost double from last year’s performance, mainly due to efficient and effective machinery, which was acquired during the first quarter of 2023.
“The company realised 911 245 tonnes in sales in the third quarter, with Hwange Power Station coal accounting for 48 percent, raw coal 39 percent, Hwange Coking Coal one percent and Hwange Industrial Coal 12 percent of the total sales.
“During the same period last year, the company sold 388 487 tonnes comprising of HPS seven percent, raw coal 55 percent, HCC six percent and HIC 32 percent. The contaminated coal sales accounted for 8 143 tonnes (2022:25 309 tonnes) in the same period.”
Mr Shava noted that for the nine months to September 30, 2023, the company realised 2 795 303 tonnes (2022:1 060976 tonnes) in sales with HPS accounting for 43 percent, raw coal 39 percent, HIC 17 percent, HCC one percent (2022: HPS nine percent, Raw coal 48 percent, HCC eight percent and H IC 35 percent of 1 060 976 tonnes), contaminated coal also amounted to 30 229 tonnes (2022: 71 933 tonnes).
“The sales improved from 1 060 976 tonnes for the same period last year to 2 795 303 tonnes, achieving a positive change of 163 percent. The positive change is attributed to doubling of production as well as an increase in marketing effort to sell off the mined coal.”
Hwange Colliery was suspended from the local bourse in 2018 following its placement under administration.-chronicle
