ZIMBABWE’S largest coal producer, Hwange Colliery Company (HCC), has applied for additional mineral reserves expected to increase the mine’s lifespan by at least 20 years, a company official said.
This follows reports the company had requested for more reserves from government saying its concessions were running out, with open cast deposits that are commercially viable to extract left with a five-year life span.
HCC MD Thomas Makore told businessdigest the application process for new coal deposits located in the western area of Hwange to give impetus to long-term objectives and increasing the company’s life span was at an advanced stage.
“The Minister of Mines Walter Chidhakwa was at the colliery in May and he has indicated they are looking into our application so we are now waiting for feedback,” Makore said in an interview after the company’s annual general meeting on Monday.
“I need to check how huge the reserves are in terms of deposits, but they will give us 20 more years.”
The company expects to double monthly output to 300 000 tonnes of coal on the back of the delivery of new equipment after acquisition of loading and drilling equipment worth US$15 million from BEML of India through a loan from Export and Import Bank.
HCC also said the company was working on procuring additional mining equipment from Belaz of Belarus worth US$18,3 million.
Makore said the equipment would be on site by August this year.
Hwange chairman Farai Mutamangira said efforts to revive the company are bearing fruit.
“We will succeed and we will continue looking for capital from everywhere, without capital we won’t go anywhere,” Mutamangira said after a dramatic annual general meeting that saw shareholders shoot down some of the proposed resolutions.
Two proposals in respect of 2012 directors’ fees and payment of US$14 million to employees as compensation for a failed 2007 share option scheme were dismissed.
Although shareholders approved directors fees for 2013 amounting to US$302 012, they turned down payment of the 2012 directors’ fees which amounted to US$476 352 for the second time, saying the money was too much at a time the company was struggling to pay workers.
HCC’s single largest individual shareholder, Nicholas van Hoogstraten argued directors were getting a lot of money at a time the company owes US$19 million in unpaid employee salaries for a period spanning 11 months.
Van Hoogstraten’s Messina Investments has 16,76% in HCC behind government which has a 37,10% stake.
“I am opposing (payment of directors’ fees) as I did last year and the reasons are pretty obvious; we are spending a lot of amounts on directors when expenses are not even accounted for. If you add expenses, the figure becomes outrageous,” van Hoogstraten said.
“Workers are not getting paid and I am sure most of these directors don’t even need the money.”
Van Hoogstraten dismissed a survey by Industrial Psychology Consultants which concluded HCCL’s directors fees were below market averages.
There were also disagreements over a messy 2007 share option scheme.
Mutamagira proposed for approval a US$14 million value restitution to 2 315 employees who subscribed to the share option scheme and avoid paying US$5,6 million which was being claimed by the workers through the courts.
Van Hoogstraten and Mines secretary Francis Gudyanga, on behalf of government, voted against the motion.