Senior Informant Zvamaida Murwira
The Mining and Mining Development Minister, Winston Chitando, defended yesterday of the Government's decision to install the Hwange Colliery Company as an administrator as there were no debt forecasts arising from debt.
He said that the Hwange Colliery Company had continued to suffer losses, although a strategic plan was expiring which anticipated huge margins of earnings.
Chitando Minister said this when giving oral evidence to the Parliamentary and Energy Parliamentary Portfolio Committee chaired by Norton MP, Mr Temba Mliswa.
Last week, the Government set the Hwange Colliery Company under the control of an administrator in Reconstruction of the Companies and Insolvency Account to avoid further exacerbation of fortune.
"The story of the Hwange Colliery Company is a bit sad, if you look at the results of Hwange, the biggest problem is that it has made a gross loss. The revenue you get is less than what it's cost to produce, "said Minister Chitando.
He said that Colliery had a net loss of $ 23 million in his half year in 2018 although he promised to work on a $ 5 million profit in his strategic plan.
Chitando Minister said Hwange had made successive losses over the years.
"That's why basically there is no business in this world that can never succeed if it costs you more than your revenue. Who pays you for that cost? December 2017, Hwange made a profit of $ 1.3 million for the first time, but posted a net loss due to that time there were several intervention measures.
"In January to June 2018 things went wrong, it was now a loss, we had a basic problem.
"That gave a warning from the Government, as a shareholder, we have a problem. You now have a decline," said Minister Chitando.
The legislators asked why there were no adequate consultations with other stakeholders as joint shareholders before making a decision.
Questions were also raised as to whether the decision to install the rebuilt coal miner would not blow a forensic examination that started the board that would go out.
Chitando Minister said the forensic examination would continue and the results were published public.
The Minister said that the decision to install Hwange under a server to prevent further deterioration. He said that the Government wants Hwange Colliery Company to return to profitability.
He said in terms of the projection of the board, Hwa-nge would make a profit of $ 269 000 in 2018, $ 39 million in 2019, $ 54 million in 2020, $ 59 million in 2021 and $ 70 million in 2022.