HWANGE Colliery Company Limited’s (HCCL) employees have not been paid their salaries for over 27 months to date.
The workers have since approached the High Court in Bulawayo seeking to have the company placed under judicial management to save it from lawsuits.
Last month, some of the miner’s equipment was sold off to settle outstanding debts and a $20,6 million slotted into consideration. ZimEye.com can reveal the employees’ leadership have since lodged their application with the High Court in Bulawayo in a bid to block further litigations and attachments.
Part of their case file reads as below:

HWANGE COLLIERY COMPANY LIMITED
WORKERS SUBMISSIONS

Intention to proceed to Court
To Lawyers
We advise that as workers of Hwange Colliery Company Limited we have not been paid regular salaries for the past 27 months. As at 30 November 2015, we were owed over US$ 46.10 million in unpaid wages / salaries, since 2014 and partly 2012 [4 months ring fenced]. We are concerned that the company seems to be progressively sliding towards bankruptcy and its going concern capability is under serious threat. The likelihood of the company’s recovery seems to be elusive given the trends that are evident to us.
We have as workers watched a development where those entrusted with the leadership and management role of the company consistently make decisions which are prejudicial to the company. We have over time become aware of decisions which in our view are calculated to siphon money out of the company to the detriment of the workers’ and other stakeholders’ interests.
It has been our observation as workers that the company is being made weak deliberately through negligent decisions emanating from the top leadership of the company. We wrote to the managing director on the 29th July 2015 as representatives requesting for answers to a number of issues which were are of concern to us on the [seeking for his assurance as to the] survival of the company. We also pointed out to him about certain contracts that we saw as not serving the interests of the company. The managing director has not responded to our letter up to date. The issues we raised have still not been responded to, or addressed.
Our concerns, as workers, have also been raised and discussed with the responsible Minister of Mines and Mining Development, Hon. Walter Chidakwa.
The published half year end results, for 2015, reflect a dire situation. The registered loss of about US$ 20 million, compared to US$ 7.6 million in 2014 reflects a worrying trend. The 12 months trading results of December 2015 will also be devastating.
The company’s balance sheet is laden with high debts. To sum it, the company is technically insolvent. This is reflected as stated below by the financial performance of the company as reported in its published results.
Weak balance sheet:
As reflected below current liabilities have increased exponentially.
1. The financial information below shows the dire state of the company.
Working Capital 2014 2013 2012 2011
Turnover 72,031,451 71,540,667 104,277,375 107,895,986
Gross Margin (10,288,812) (10,417,091) 40,240,483 35,485,969
Operating Profit(Loss) (51,540,220) (40,375,715) 7,116,653 4,130,800
Total Current Liabilities (209,786,705) (162,327,137) (125,184,444) (86,010,233)
Total Current Assets 87,478,003 85,097,025 104,449,163 62,673,051
Net Current Assets (122,308,702) (77,230,112) (20,735,281) (23,337,182)
Salary Arrears
The managing director promised to pay us regular salaries three months after the commissioning of the production new equipment, in July 2015. This has not materialised. We have however noticed a rapid drop in own mining output, with September, October, November and December 2015 witnessing the worst mining output in the history of the company. This is very poor performance, despite the fact that the Government has assisted the Company to recapitalise its operations to the tune of USD31 million in equipment and machinery. This equipment was commissioned in July 2015. The Government went further and allocated the Colliery three mining Concessions, i.e. Western Areas and Lubimbi East and West. Furthermore, Hwange Colliery was assisted with working capital to the tune of USD 4 million between September and October 2015. We cannot continue to rely on Contractor production [Mota Engil], whose machinery is far smaller than ours.
It is therefore apparent that the current Board and Management are incompetent to cause the Company to turn around and be profitable. The analysis of the production figures for the Opencast mining area, which benefitted from the newly acquired equipment and machinery, are as follows, for the months of June 2015 to 22 November 2015:
Month Production [Tonnes] Target [Tonnes] Percentage Of Target
June 2015 9 720 150 000 6.48%
July 2015 36 530 150 000 24.35%
August 2015 43 150 150 000 28.76%
September 2015 50 614 150 000 33.74%
October 2015 70 290 200 000 35.15%
November 2015 86 100 200 000 43.05%
December 2015 37 755 200 000 18.88%
TOTALS 334 159 1 200 000 27.85%
The workers do not wish to engage in any form of collective job action against the company. This is because we realise that the company has been made weak by actions of a few individuals who are at its management and top leadership. The workers do not want to make the company any weaker through any collective job action or legal action against it. The workers would like the board members and the former chairman to be held personally liable for the current status of the company. We realise that the chairman was asked to leave the company. We view him as part of the board that has been responsible for the affairs of the company. To us as workers, the Board is inclusive of and comprises the non-executive appointees and the managing director.
We mention below board decisions and actions that show us that the board has been responsible for the company’s demise for which they should be held responsible in their personal capacities.
1. Palehouse Contract:
The board decided not to properly close the contract in 2012, in which the company would have bought a screening plant that was lease to the company at a price of $ 500 000. The matter was taken to court after Palehouse made a claim of $7 million against the company. The matter was settled out of court and the company was committed to buy the screen for $ 5 million. Is this not negligence by board members? The company has been obligated to this disproportionately high amount, resulting from the board’s decision, when the machine could have been bought at a price of $ 500 000, compared to the eventual amount of $ 5 million which was settled through arbitration. There is obvious lack of transparency in the transaction. How does a board chaired by a lawyer fail to make a correct decision which within a year translates to a liability that is ten times what it should have cost the company to buy?
2. Colbro Contract:
The Colbro transport has been retained to move coal at the expense of attending to the repairs of the Conveyor Belt that transports coal to the Hwange Power Station [ZPC], or servicing the company’s 30 ton Volvo trucks. The coal hauled by Colbro is not being weighed as part of controls of the company. Samples of moved coal moved should be weighed daily on a random basis to ensure that the company is properly charged for coal hauled. As workers we are aware of this omission and we believe this is deliberate omission by management. This reflects that senior management is conflicted with management serving external interests at the expense of their employer.
3. New Opencast Equipment:
The “new’ Opencast operations machinery and equipment bought, particularly from India [referred to as BEML], has been grossly underperforming, due to frequent breakdowns. This is clearly reflecting poor due diligence on the part of the board and executive management. Workers believe that this equipment was bought as second hand [used equipment]. We therefore cannot rule out fraud and corruption in the acquisition of the BEML machinery. One Section Engineer was almost fired for remarking that the equipment was second hand. Despite the workers’ recommendations that this equipment should be returned to the suppliers, the board and executive management have not taken action to do so.