On A Date with Hwange Colliery Company Limited (Currently Suspended from trading on the ZSE)
Dating is a critical stage to any investor considering to take a position on any asset class even shares.
#1. History,
1893, Albert Giese a German prospector discovers coal in Wankie District and a year later pegs land close to Kamandama River.
1894, British South Africa Company (BSAC) sell concession rights to Mashonaland Agency Limited (MAL).
1901, MAL sells its concession rights to Wankie (Rhodesia) Coal, Railway and Exploration Co
1902, No.1 Colliery shaft reaches coal a year later rail is used to transport coal to Bulawayo.
1909, company changes name to Wankie Colliery Company Limited (WCCL).
1927, No.2 Colliery is commissioned
1950, a British company Powell Duffryn Limited (PDL) takes over the operations of WCCL.
1953, Anglo American Corporation takes over WCCL adding No.3 Colliery and list it 5 years later primarily on ZSE and on JSE plus LSE.
1961, No.1 Colliery is decommissioned
1972, A total of 427 miners die at the Kamandama mine (No.2) disaster. The Colliery is closed.
1976, No.4 mine shaft is commissioned but is decommissioned 4 years later.
1982, JKL Opencast mine is developed to increase supply to ZESA’s thermal station.
1983, 40% of WCCL is bought by the Government of Zimbabwe
1993, WCCL acquires a stake in Zimchem Refineries a chemicals maker.
1994, +6 million tonnes of coal produced
1998, 49% of Clay Products is snapped up by WCCL and a year later No.3 Colliery is decommissioned.
2004, WCCL changes name to Hwange Colliery Company Limited.
2017, suspended from all the stock exchanges whilst working on a scheme of arrangements.
#2. Operations,
HCCL is a business that explores, mines, processes and markets coal, coke and its associated by-products.
Coal products are marketed in 3 categories,
° Thermal Coal
° Industrial Coal
° Coking Coal
Coke is marketed in 4 distinct categories.
Thermal Coal
It is also known as steaming coal widely used as the principle means of generating electricity.
Industrial/Coking Coal
Metallurgical coal or coking coal is used to create coke. Coke a key input for the production of steel.
Uses of Coal
#3. Customers,
Zimbabwe Power Company
ZPC operates the 930 MW Hwange Thermal Power Station
ZIMASCO
A ferro-chrome producer which runs smelters in Kwekwe to process chrome
Afrochine
A subsidiary of Tsingshan a conglomerate which produce stainless steel
#4. Competitors,
Makomo Resources
A privately owned coal producer which supplies ZPC, industries and agriculture.
Zambezi Gas and Coal
A wholly owned Zimbabwean held company operating in coal mining and coal-bed methane.
South Mining
Chilota Colliery
#5. Management,
Dr C. Zinyemba – MD
A holder of an Executive Masters in Business Administration
Started out in the medical field but has proved businesses just like people get sick thereby need a doctor to identify the trouble and deal with it.
#6. Share Price,
HCCL closed its last trading day (Thursday 11th of October 2018) at 0.0425
Issued shares 183,720,699
#7. Shareholding,
36,77% of the business is controlled by the Government of Zimbabwe.
16,61% is controlled by Nicholas van Hoogstraten through his investment vehicle Messina.
#8. Thoughts
Do you see any prospect of this business returning to the stock market?
What should be done to improve the operations of this business?
Do you thing the government should dispose its shareholding in HCCL?
What is the future of fossils given drive towards clean energy?
Each week will be on a DATE with a company listed on the ZSE with Martin Mataga Twitter @MartinMataga.
The purpose of this thread is to assist investors to have a minimum appreciation of listed firms.
Disclaimer: Do not misconstrue this thread as investment advice. DATE companies before you buy their shares.
