Buffalo reports mixed Q1 performance
JOHANNESBURG (miningweekly.com) – Buffalo Coal’s run-of-mine (RoM) production for the quarter ended March 31 decreased by 26% year-on-year and by 9% quarter-on-quarter, as a result of lower output at the Magdalena mine, offset by marginally improved production at the Aviemore mine.
Aviemore’s RoM production increased by 17% year-on-year, mainly owing to dykes encountered in the mining areas in the first quarter of 2017, which slowed down production during the comparative period.
The mine’s RoM production was also 4% higher quarter-on-quarter, as a result of fewer dykes having been encountered.
Magdalena's RoM production for the first quarter was, however, 44% lower year-on-year and 18% lower quarter-on-quarter, primarily as a result of difficult geological mining conditions and pit-room constraints first encountered during 2017 that continued during the first quarter.
To mitigate the loss of production at Magdalena, Buffalo Coal has entered into an arrangement with a neighbouring coal miner to buy in about 6 000 t/m of anthracite coal.
The buy-in tonnes may increase, subject to availability.
Meanwhile, Buffalo’s revenues (excluding high-ash sales) for the first quarter improved by 15% year-on-year owing to higher anthracite and calcine sales, which were partially offset by lower bituminous sales.
Revenues decreased by 18% compared with the fourth quarter of 2017 as a result of lower anthracite sales partially offset with higher calcine sales.
Average selling prices (excluding high-ash sales) for the first quarter showed an 18% improvement year-on-year and a 5% improvement quarter-on-quarter.
The improvements were attributable to better selling prices negating the impact of the lower sales volumes.
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