Zimbabwe's Hwangwe Colliery in talks to sell coal to Glencore

HARARE, Feb 23 (Reuters) - Zimbabwe coal producer Hwange Colliery said on Monday it was negotiating to supply coal and coke to global miner Glencore (Xetra: A1JAGV - news) and a deal could be reached at the end of this month, its managing director said.

Thomas Makore said Hwange, which mines in the northwest of the country and is the biggest coal supplier to state-owned electricity producer Zimbabwe Power Company, was currently exporting coal to ArcelorMittal South Africa.

"Discussions are happening right now with Glencore to supply coal and coke and we want to reach a conclusion by the end of this month," Makore told Reuters.

"Exports would then start thereafter. What motivated us to talk to Glencore is that they are a very big coal supplier and producer and it made sense to engage them," he said.

Makore said monthly coal production had doubled between September and December to 300,000 tonnes after the company upgraded some of its ageing equipment.

Hwange, which sits on some of the country's richest coal deposits in the country, was targeting to produce over 300,000 tonnes a month this year, said Makore.

He said the company expected to commission new mining equipment in May after getting $33 million in loans from the central bank and India Export and Import Bank.

Hwange, in which Zimbabwe's government is the biggest shareholder with 37 percent shareholding, is also raising funds to repair a coke oven battery.

Once repaired, it would increase coke production to 216,000 tonnes annually from 120,000 tonnes, said Makore.

"Our exports are not as big as we would like to be but once we fix the coke oven battery this should change," Makore said. (Reporting by MacDonald Dzirutwe; Editing by James Macharia)