Tough times for Hwange

On June 19 last year, Vice President Phelekezela Mphoko, on behalf of the Government of Zimbabwe, commissioned equipment worth $32 million that was largely touted as signalling the renaissance of Hwange Colliery Company.

A year later, of the 10 dump trucks that were commissioned, only three are working; neither of the two heavy-duty excavators commissioned is working. Of the six wheel dozers officially handed over, only one is working and all the four tract dozers are not working. The only equipment still standing and operating are the drills, three of them.

Whilst mine workers that were spoken to by The Sunday Mail Extra, who cannot be named, exonerated senior mine management for the failed mine equipment, “because the equipment was literally dumped on the mine by the Government”, the same workers argue that management should have stood their ground as the equipment is not suitable for the terrain and operating weather conditions of Hwange.

“Hwange lies in an extremely high temperature region,” explained one of the workers, “and that the equipment was sourced from countries that enjoy low temperatures, is one of the reasons why the equipment has failed to cope. The temperatures here are always high, and given the uneven terrain that we work on, this has added to the ease with which the equipment has failed.”

Charles Zvandaziva, the acting open cast mine manager, who took The Sunday Mail Extra on a guided tour of the mine, masked the zero production at the mine on the day of the tour as a maintenance day but workers who spoke anonymously said they had gone for almost a week without diesel, a major component of production at the mine.

In answers to emailed questions, Thomas Makore, the managing director of the colliery, said: “There was an electrical fault on one BELAZ front-end loader that caused a fire that engulfed the operator cabin. Otherwise, all the machines are working. Performance challenges have only been in respect of two excavators supplied by BEML and the challenges have been brought to the supplier’s attention. The challenges have been a combination of technical problems and operating conditions. Their performance have been under close monitoring because we have not achieved the specified throughput or performance.”

He laid the blame of the diesel outage due to a tight fiscal operating environment.

“Mining operations are capital intensive and require a large amount of working capital. The fuel stock-outs and inconsistent supply of production inputs due to inadequate working capital are some of the major reasons for the subdued production levels.”

The zero production levels at the mine are in sharp contrast to the enthusiasm that the mine oozed last year as the multi-million-dollar equipment was commissioned, which had even the Vice President purring:

“This investment will put Hwange Colliery at a vantage position to totally turn around, start posting meaningful profitability and thereby meeting shareholders’ expectations of the meeting the net worthy of the company. There are important spin-offs from the initiative ranging from the preservation of a going concern to the safeguarding of the employment of 3 000 of our local people. Government, like all other shareholders in the company, expects to start receiving some dividends sooner rather than later.”

To compound the mine’s woes, the underground mine, which was providing coking coal, Hwange’s most priced product, halted production all together in September last year because the continuous miner broke down.

“Unfortunately the underground mining operations stopped last year when the critical mining equipment for underground mining , the continuous miner, had a major breakdown. This piece of equipment and other supporting equipment needs to be refurbished or replaced. The total cost is approximately $6,4 million,” explained Makore.

As the financial challenges facing the mine mounted, management, with the blessings of the board, resolved to send eight out of its 12 executive managers home. The four remaining executive managers are for medical services, mine planning, business development and finance.

“The colliery underwent management restructuring because of the economic slowdown worldwide where demand has significantly reduced and prices have fallen. In order to survive, the company had to restructure its management to reduce employment costs, which were not tallying with the company’s business activity,” said Makore.

Whilst the returns from the axing of top management are yet to be realised, the general workforce is sweating over their 34 months of salary arrears.

“It is common that students with parents who work for Hwange report for classes weeks after schools open. But the children for senior management, some who attend the top private schools in the country, never miss a day of class. Some are yet to collect their results from last year’s November examinations, because they owe their former schools a lot of money,” charged one parent.

Makore readily acknowledged the salary backlog, putting it at 30 months’ arrears, instead of 34. However, when he was appointed managing director and even as the mine commissioned its thirty-two-million-dollar equipment last year, he proposed a turn-around time of three months, after which the mine would start honouring its salary obligations.

But a year after commissioning, mine workers are complaining that they are only getting intermittent allowances, of which the last $200-across-the-board was given in January this year. And just a week before the Kamandama Disaster commemorations, the workers were given food handouts.

“They wanted us to attend the commemorations,” hit back the workers, “and they even promised us salaries the following week. They hoodwinked workers to attend the commemorations.”

But Makore was singing a different hymn altogether: “The salary arrears amount to an equivalent of 30 months’ salaries. The company is currently considering a number of options in order to address the salary arrears which options the company shall soon table to the employees.

“The plan to be tabled balances both the employees’ and company’s interests and the plan is aligned to the company’s turnaround business to enable the company to direct its resources to areas of production and return on investment so that debt, loan and recurrent obligations are met on a sustainable basis.”

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