JOHANNESBURG (miningweekly.com) – Improved international coal prices and a weaker rand contributed to higher revenue for JSE-, ASX- and Aim-listed MC Mining in the second quarter of the current financial year.
The company, which was until last year known as Coal of Africa, on Wednesday reported that its revenue per ton in rand terms was 26% higher quarter-on-quarter, at R833 for the quarter ended December 31, compared with R659 in the first quarter of the financial year.
Revenue per ton in dollar terms rose by 22% quarter-on-quarter to $61.09 in the second quarter, from $50.03 in the first quarter.
MC Mining’s overall run-of-mine (RoM) production increased by 3% quarter-on-quarter to 175 915 t, compared with the 170 421 t produced in the first quarter.
The Uitkomst metallurgical and thermal coal colliery’s RoM production increased by 12% quarter-on-quarter to 140 501 t; however, RoM tons bought decreased by 22% quarter-on-quarter to 35 414 t.
The reduced availability of slurry and constrained supply from a third-party opencast mine supplier resulted in a 14% decline in sales of metallurgical, high-quality and thermal blended coal from Uitkomst, resulting in sales volumes declining from 165 432 t in the first quarter, to 142 843 t in the second quarter.
The 140 501 t of RoM coal produced during the quarter resulted in sales of 94 271 t.
Sales from slurry processed at the wash plant reduced by 53%, from 36 489 t to 17 201 t; while sales derived from RoM coal purchased from nearby collieries and blended, or sold directly, yielded 31 371 t.
MC Mining CEO David Brown said the company had made significant progress during the second quarter, with increased production and profitability at the Uitkomst colliery, the successful sale of the noncore Mooiplaats colliery and the change of name and share consolidation corporate actions.
“The sale of the Mooiplaats colliery is the final step in the company’s balance sheet restructuring strategy, setting the course for MC Mining to become a self-sufficient, midtier coal mining company,” he stated.
He added that the Mooiplaats disposal would result in yearly operational cost savings of about $1.4-million, with the aggregate sales proceeds of about R179.9-million being earmarked to further develop MC Mining’s flagship Makhado project.
Alternatively, Brown also pointed out that the aggregate proceeds could also be used in the potential acquisition of a cash-generating asset.
“The Makhado project has the requisite regulatory approvals to commence mining and MC Mining continues its efforts to secure access to two key properties for the completion of confirmatory geotechnical work, ensuring appropriate positioning of the project footprint.”
The company anticipates that this will be resolved before June, with construction to follow in the first half of 2019.
The accelerated build-plan ensures Makhado is positioned to take advantage of higher hard coking and thermal coal prices, Brown said.
Meanwhile, MC Mining’s oil and gas exploration entity on Wednesday also reported a cash flow for operating activities of $3.7-million for the December quarter.