HWANGE Colliery Ltd., a partly state-owned Zimbabwean coal miner, plans to cut 1,500 jobs this year to make it more viable and has put measures in place to protect it from lawsuits, Deputy Mines Minister Fred Moyo said.
“Hwange’s labour force is 3,000 and about 1,500 are going to be laid off to make the company remain viable,” Moyo told lawmakers leaders in the capital, Harare. The country has a 37% stake in the company. “Government has put in place a scheme arrangement authorized by the High Court which will protect the company against litigation.”
Hwange operates a mine in northwest Zimbabwe and is the country’s largest coal miner after Makomo Resources (Pvt) Ltd. and a supplier of the fuel to state-owned power utility Zesa Holdings (Pvt) Ltd. British businessman Nicholas van Hoogstraten holds 20% of Hwange through Messina Investments Ltd.
The development comes on the back of a deepening economic crisis on the southern African nation.
Zimbabwe is delaying salary payments to army and air force personnel by two weeks because of cash shortages at the Finance Ministry.
President Robert Mugabe’s administration took the decision because of a worsening shortage of dollar notes in recent months.
Since abandoning its own currency in 2009 to end hyperinflation, Zimbabwe has used mainly U.S. dollars, as well as South African rand, euros, and British pounds. The government spends about 83% of its revenue on wages for state workers, according to Finance Minister Patrick Chinamasa.
While the government has been postponing paydays for civil servants since 2014, it hasn’t been clear previously if the military was affected. Some soldiers looted shops in the capital, Harare, in 2008 when their pay was delayed at the height of Zimbabwe’s hyperinflation crisis, triggered by a failed land reform program that slashed agricultural exports.
At that time, inflation accelerated to about 500 billion percent, according to the International Monetary Fund. The economy has halved in size since 2000.
FOLLOW NEW AFRICA BUSINESS NEWS ON FACEBOOK @ New Africa Business News.com