HWANGE - Hwange Colliery Company Limited (HCCL) is battling to convince prospective financiers to loosen their purse strings as they are sceptical about dwindling coal reserves at the mine.The coal producer needs close to US$200 million for recapitalization. Sources who recently attended an HCC board meeting in Victoria Falls said dwindling coal reserves at the mine were cited as the reason behind failure to attract huge capital.
The current reserve can last the mine about 25 years and thats not good news for potential financial backers. They would want concrete re-assurance that the company is in a position to fully pay back loans with interests throughout the lifespan of available coal reserves, said the source.
The source said some potential financiers had indicated that they were sceptical about the current levels of reserves.
The short term solution, according to the source, was for the government to offer them new coal mining concessions to boost reserves.
HCCL recently applied to the government for a mining grant for the Lubimbi and Entuba coalfields.
HCCL managing director, Fred Moyo, could not be reached for comment.
Post published in: Economy