HomeBusiness DigestHwange Colliery to use contracted port terminal space

Hwange Colliery to use contracted port terminal space

The company is currently using South African Grinrod’s terminal under a short term contract.

MD Fred Moyo said that terminal space was a major drag on the company’s move to exports because much of the space at the Beira and Maputo ports was taken up.

Moyo said accessing the ports was expensive for non South African companies.

The Maputo port is now a significant port for South African coal exporters and the expanding Mozambican coal industry. The Maputo harbour is ideal for the Indian market because the 50 000 tonnes ships loaded at Matola are easily available.

Moyo said the group was ready to make its first shipment of coking coal to Asia after negotiations over the price had been concluded. Hwange secured a market to export 40 000 tonnes of coking coal a month to India. This could rise to 50 000 tonnes as the National Railways of Zimbabwe had successfully managed to move the coal.

NRZ had now introduced a daily train to Mozambique.

NRZ CEO Air Commodore Mike Karakadzai has in the recent past said that coal constitutes 50% of its goods business. The rest is split among fuel at 23%, agriculture commodities at 18%, transit at 9% while the balance goes to industrial output.

Karakadzai said NRZ ring-fenced Hwange to enable the company to meet its target of 7-8 million tonnes this year.

Moyo said there was a huge demand for coking coal, particularly in the Asian markets adding the region had a shortage of 60 million tonnes annually. The company will earn US$4 million monthly from exporting 40 000 tonnes.

Moyo said Zimbabwe was a huge source market as South African coal had reached its export peak and the bulk of Mozambican coal was under contract from international mining firms.

Moyo said the price obtained on the export market was much higher than the price that was obtained in the country since Zesa was the major buyers at a subsidised US$30/tonne. Export markets pay a price of plus or minus US$100 per tonne.

Earlier this week, the company published a tender which invited bids for the supply of equipment for open cast mining, underground mining and coal plant. The equipment tendered for includes heavy duty pumps, articulated dump trucks, 7-tonne explosives vehicle, heavy duty mobile crane, power packs, pumps and submersible pumps.

The bidders for the tender, which closes on May 31 should be in a position to structure supplier credit on competitive terms. The equipment is worth more than US$45 million.

Moyo said the company had the space for expansion and the buyers who needed coal. There were also equipment suppliers who were stuck with equipment, which they needed to sell. The three parties; Hwange, buyers and equipment suppliers, he said, had to come to an arrangement.

Moyo said that the group was currently negotiating for the US$175 million DBSA facility which will be used to finance the company’s recapitalisation.

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