TRI-listed coal producer, Hwange Colliery Company Limited (HCCL), has terminated a five-year contract mining deal with mining magnate, Billy Rautenbach's Clidder Minerals.
A board member said HCCL would however, continue to outsource mining equipment when necessary.
The coal deal, which has been running since 2007, was terminated at the end of October last year, HCCL chairperson, Farai Mtamangira, told The Financial Gazette's Companies & Markets (C&M) last week.
He could not say why the deal had not been renewed if HCCL required additional capacity to augment available capacity.
"We are now mining alone," Mtamangira told C&M.
Under the deal, Clidder, which has been developing its own coal mines in Sinamatela, about 35 kilometres west of Hwange town, provided additional equipment to help HCCL, then severely undercapitalised and battling hyperinflation, to mine enough coal.
The transaction was expected to improve power generation at the coal fired electricity plants near the mines.
Clidder had been producing at least 100 000 tonnes of coal for HCCL per month.
However, if not carefully planned, the termination, which comes before the mining giant completes a recapitalisation programme requiring more than US$85 million, could trigger a fresh round of power shortages in Zimbabwe.
The country has battled acute coal shortages that have resulted in reduced electricity generation at coal-powered plants, triggering blackouts that have grossly affected industrial output.
A number of private firms have resorted to imports to limit the effects of constrained domestic supplies.
"We are still leasing equipment here and there," the HCCL chairperson added.
HCCL registered a fall in basic earnings per share to 0,02 US cents during the year to December 31, 2011, from 0,03 US cents during the full-year to December 31, 2010 and suffered a loss but returned to profit during the half-year ended June 30, 2012.
The mining giant's share price has plunged to about US$0,22 from about US$0,50 in 2011, on the Zimbabwe Stock Exchange.
HCCL is also listed on the London and Johannesburg bourses.
Outspoken shareholder, Nicholas van Hoogstraten has previously blamed the poor performance on "corruption" and poor management but was confident that the Mtamangira-led board, whi did not renew Fred Moyo's contract as CEO, would turn around HCCL and rid it of vice.
During the half-year to June 30 2012, HCCL, which recorded a US$1,5 million loss in 2011, has posted a net profit of over US$500 000.
The coal and coke miner reported a net profit of US$512 006.
Turnover surged by seven percent to US$51,8 million, from US$48,6 million during the comparable period in 2011.