Wankie Colliery is planning to retrench 269 workers because of cashflow problems. The retrenchment was scheduled for the end of this month but had not yet been sanctioned by the Ministry of Labour.
Under the present political climate and devastating drought it is doubtful that the ministry will sanction the dismissals as this could be political suicide.
The situation at the colliery is also not conducive following revelations by Frederick Gwaradzimba that there are widespread thefts at the colliery by senior management. He claimed these thefts, which were the order of the day, were responsible for the present crisis in the company.
Colliery chairman Ngoni Kudenga, however, said the company was having problems because of the drastic depreciation of the Zimbabwe dollar. The company’s major customers were also delaying their payments.
The depreciation of the dollar, Kudenga said, had resulted in prices of imported machinery and spares going up by 400 percent while its products were controlled.
The price of coal was increased by 45 per cent in March. Kudzai Bwerinofa, the company’s managing director, had claimed that the company would lose $24 million if it was not granted a favourable price increase.
He said Zimbabwe’s coal was probably the cheapest in the world as it sold for only $55 a tonne compared to an average of US$35 (Z$175) a tonne elsewhere.
According to its report last year the company made a profit of $35.8 million but was only able to reduce its loans from $68.8 million to $57.2 million.