Hwange under pressure from foreign-exchange effects
The group has legacy foreign debts of $20m, which weighed on its results in its six months to end-June
Zimbabwean miner Hwange Colliery, which was placed under administration in 2018, swung into a first-half loss to end-June as it continueD to grapple with legacy US dollar-denominated debt.
The group, which mines and processes coal, coke and related by-products in the northwestern part of Zimbabwe, reported a net loss of ZWL992m in the six months to end-June from net profit of ZWL3.5m previously.
This came amid a negative ZWL1bn loss related to legacy foreign debt.
“Total legacy foreign creditors currently stand at $20m and therefore this problem will persist until these have been fully settled,” Hwange said.
The group said foreign-exchange shortages weighed on its ability to acquire critical spares, while Covid-19 restrictions also led to delays.
Hwange was placed under administration in 2018 after sustained losses cast doubt on its future, but the group said it was seeing improvements in the willingness of creditors to extend it lines of credit.
“As a result, we are confident that the operations will stabilise within the next 6-12 months,” Hwange said. “Our immediate target is to consistently produce at least 200,000 tonnes a month by the end of first quarter next year.”
Total production increased 84% to 596,876 tonnes in the six months to end-June, the group said, expecting further improvement in the months ahead.
At the 51c per share that Hwange last traded on the JSE, it had a market capitalisation of R86m.
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