MC Mining’s loss widens as coal prices fall
Coal prices fell by almost a third during the miner's half-year to end-December, though it managed to increase production
MC Mining said on Friday that changes in mine management failed to offset a steep fall in coal prices in its year to end-December, when its loss almost doubled.
The group reported loss for the period of $7.1m (R115m) from $3.6m previously, with coal prices under pressure in 2019 from lower natural gas prices.
The 30% decline in coal prices resulted in revenue decreasing to $11.4m from $15.2m previously, the group said, despite a reduction in the cost of sales.
MC Mining relies on the Uitkomst mine for cash generation, but its priority is its flagship Makhado project, which will produce coking coal and thermal coal once production begins.
The group said it is making “steady progress” in securing the funding initiatives for the first phase of Makhado, with the group saying it expects this to be completed in the first half of 2020.
The group has moved to improve its production at Uitkomst, saying on Friday that run-of-mine coal production increased 11% during its half-year to end 2019.
In the company’s year to end-June, Uitkomst transitioned to an owner-operated colliery following the transfer of the underground mining contractor Khethekile Mining’s 340 staff and equipment to MC Mining.
The company said in 2018 that it had spent R65m on acquiring the equipment to solve issues regarding the availability of the contractor’s equipment.
In afternoon trade on Friday, MC Mining’s share price was unchanged at R1.80, having fallen 71.92% so far in 2020.