Zambia MCL Stuck With 50,000 Tons Of Coal, Faces Fincl Squee
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29 juillet 2009
11:26
Dow Jones International News
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Zambia's largest coal producer, Maamba Collieries Ltd., or MCL, is stuck with up to 50,000 metric tons of coal and is facing a financial squeeze due to a lack of buyers for its products, company officials said Wednesday.
According to Stephen Mutambo, the MCL managing director, said between April and July the mine has been able to only sell 40,000 tons of coal out of the 90,000 tons produced and this is straining its cash flow.
This failure is blamed on disruptions to mining most of last year which compelled coal buyers, mainly copper mines, to sign long-term supply contracts with foreign suppliers.
"The company is unable to meet its financial obligations because they are not selling coal," an official with Zambia's state mining company, Zambia Consolidated Copper Mines Investments Ltd., or ZCCM-IH, owners of the mine told Dow Jones Newswires Wednesday.
ZCCH-IH has suspended payment of workers' wages at the company and asked management to look for coal buyers to improve its cash flow. Workers have now not been paid since June and union officials say that this is likely to cause unrest.
Until last year, Maamba Collieries was the leading supplier of coal to copper mines in Zambia and Congo's Katanga province. Following months of workers' unrest amid financial difficulties, the government decided to hand over the mine to ZCCM-IH last year to a bid to revive its operations.
Earlier this year, ZCCM-IH selected Singapore-based Nava Bharat as an investment partner in the mine, but talks are still underway for the final takeover.
-By Nicholas Bariyo, contributing to Dow Jones Newswires; +256 75 262 4615; bariyonic@yahoo.co.uk [ 29-07-09 0926GMT ]
Document DJI0000020090729e57t000mh