Zimbabwe’s HCC to cut 1,000 jobs as capital runs short

CAPITAL constraints will force Zimbabwe’s Hwange Colliery Company (HCC) into reducing staff numbers by a third despite government efforts to boost the firm’s productive capacity to about 300,000 tonnes of coal per month.

Fred Moyo, the deputy Mines and Mining Development minister, said in parliament on Wednesday that HCC was “… having challenges in getting working capital” as it grappled with sub-standard equipment.

HCC has become mostly reliant on contract mining under an arrangement with a company called Mota-Engil after the breakdown of the colliery’s own equipment.

“We are trying to get local financial sectors to assist the company,” said Moyo.

“I am going to be talking to some of our bankers as early as tomorrow (June 23), to try and see if the company can, in fact, access some short-term loan to close the gap of working capital shortages,” he said.

HCC reported a $115m loss for the year period to end December 2015. Reducing its workforce by about 36% will save $15m a year. “The business permutation indicates that the correct level of employment will be around 2,000 employees,” said Moyo.

HCC’s production constraints have affected coal supplies to some thermal power stations in Zimbabwe. The southern African country is already grappling with severe power shortages that have disrupted productivity in mining and industry.

“With regards to the output, our plan at the moment is that this equipment must produce a minimum of 150,000 tonnes per month and the contractor will produce a 150,000 tonnes per month. That should more or less satisfy the current market demand,” added Moyo.

HCC appointed a new board earlier this month lead by Mimosa executive chairman, Winstone Chitando, whose job it is to refocus the company. It’s capital short-comings have left employees unpaid for lengthy periods.

“Creditors, including banks, suppliers and employees are owed amounts spanning more than two years and are pressing for payment,” said a mining industry source. “However, the new board is coming up with a priority list and has asked for measures such as laying off workers,” the source added.