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Zimbabwe: Hwange Seeks to End Coal Gasification Deal

Photo: The Herald

Hwange Colliery mine in Zimbabwe.

Hwange¬†Colliery Firm Restricted is negotiating with Chinese firm, Taiyuan Sanchin Financial and Change Firm to terminate the parties’ construct, own, operate and switch (BOOT) settlement for Hwange Coal Gasification Firm.

The coal mining large decided towards its prior plan to assemble A Brand New coke oven plant (battery) within the short -term, and wants to refurbish the outdated one. A Brand New coke oven battery could be constructed at some point, HCCL mentioned.

HCCL had entered right into a BOOT agreement with TSEC, to construct a coke oven battery with capability to supply 300 000 tonnes once a year, however as an alternative the Chinese put in a battery of 1/2 the agreed capability.

The Relationship between the 2 parties has at all times been strained with HCCL earlier accusing TSEC of failing to meet some contractual responsibilities and in addition externalising foreign currency echange working into hundreds of thousands of bucks.

Chief govt Thomas Makore informed The Herald Industry that HCCL is negotiating with TSEC to terminate the ten-year BOOT agreement in advance in order that HCCL does no longer have to purchase A Brand New battery within the brief-time period.

“We’re following a phased approach when it comes to coke oven battery capability. We’re a 25 p.c shareholder in Hwange Coal Gasification. That BOOT settlement had a tenure of 10 years, so We Are negotiating to terminate it early so that we takeover that battery in an instant,” Mr Makore mentioned.

HCCL is experiencing critical Production challenges after acquiring faulty gear from Bharat Earth Transferring Restricted (BHEL) of India, which has viewed output falling 30-Forty percent behind the 350 000 tonne target by September.

HCCL said coal output declined to 1,Fifty Five million tonnes within the yr to December 2015 from 1,88 million tonnes over the identical length the prior 12 months, 2014.

Production challenges come at a time when demand for coal will not be growing given viability problems going through its main purchaser ZPC, most industrial customers and the decline in utilization by tobacco farmers.

Mr Makore stated that whereas toll Production of coke is an possibility, the company had now not started pursuing this different choice and so will not be producing coke, at the least within the close to foreseeable future.

HCCL’s loss widened to $115 million within the year to December 2015, from $38 million within the comparative period after the corporate acknowledged a liability to Zimbabwe Earnings Authority, which was once accumulated over six years.

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