HomePoliticsGovt responsible for Hwange woes'

Govt responsible for Hwange woes’

Itai Mushekwe

THE country’s coal crisis, which is threatening to cripple economic activity, has been blamed on government’s non-payment of coal supplies by

Hwange Colliery, a document titled “Update on Coal Supply Situation” prepared this week by the coal producer reveals.

Government, through power utility Zesa and steel company Ziscosteel, consumes 66% of national coal output, according to the document. Without making a candid reference to government, the coal producer says the supply of adequate coal to all industries in Zimbabwe is well within the company’s capacity as “a permanent solution that addresses the non-payment by major customers is being put in place with the involvement of all stakeholders”.

Zesa’s Hwange power station and its old thermal power stations alone chew 2 700 000 tonnes of coal annually, which equates to 55% of national output estimated at 4 945 600 tonnes.

Ziscosteel uses 540 000 tonnes of coal per annum or 11% of total production. Other key customers of the company include coal distributors, cement companies, mines, brick makers, agriculture and general industry accounting for 34%.

Hwange Colliery marketing and public relations manager Clifford Nkomo on Wednesday said the firm was facing cashflow problems and had obsolete equipment. He said production had plummeted due to Zesa and Ziscosteel’s failure to make timely payments for coal supplies.

“We’re facing cashflow challenges and our machinery is now obsolete,” he said. “Failure to make payments by companies such as Zesa and Ziscosteel — our biggest customers — has left us without money to buy spare parts and fuel, thus reducing production capacity. However, the two are now showing willingness to pay. In July the central bank paid $1,5 trillion to settle Zesa and Zisco’s debts.”

Failure by Hwange to produce adequate coal supplies has resulted in some companies importing it from Zambia and Botswana. Nkomo said the coal miner had since come up with investment
valued at over US$15 million to achieve optimum production through two new mines — the 3-Main underground and Chaba Opencast.

The new mines mark Hwange’s transition from its old mine, the No 3 M Block underground and JKL Opencast opened in 1981. The two new mines, Nkomo said, have a lifespan of 25 years.

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