Coal producer MC Mining reported mixed operational results for the quarter to end-December, with progress at its Makhado project contrasting with underperformance at its Uitkomst Colliery amid continued weakness in thermal coal prices.
In a statement on Friday, the company said construction at Makhado — a hard-coking and thermal coal project in Limpopo — continues to advance, with key milestones achieved during the quarter. Start-up testing of the plant is now scheduled for March, and a 14km power line is under construction to supply electricity to the site.
While Makhado moves towards production, Uitkomst Colliery in KwaZulu-Natal, a producer of thermal and metallurgical coal, faced operational challenges for the quarter. Coal output fell to 57,606 tonnes, down 40% from the same period last year, while sales of higher-grade coal dropped 34% to 40,229 tonnes. Production costs per tonne rose 32% to $116, the company said, largely due to lower volumes and an ageing mining fleet.
MC Mining ended the quarter with $2.9m (R46.5m) in cash and facilities, down from $13.2m in the previous quarter. The company said it received $7m from Kinetic Development Group through a share subscription agreement and repaid R10m of its Industrial Development Corporation loan.
The company said weak coal prices continued to weigh on results, contributing to tighter revenue and financial pressure. Thermal coal averaged $86 per tonne, down from $110 a year ago, while premium coal for steelmaking averaged $199 per tonne, slightly below last year’s $206.
Looking ahead, MC Mining said it would continue preparations for the Makhado start-up while assessing ways to boost production at Uitkomst.