PERTH (miningweekly.com) – South Africa focused MC Mining has reported increased production during the June quarter at its Uitkomst colliery, despite ongoing equipment challenges at the mine.

Run-of-mine (RoM) production for the three months to June was up by 7% on the previous quarter, reaching 123 771 t.

MC Mining noted on Thursday that the mining contractor at Uitkomst had experienced continued equipment availability challenges during the quarter, with MC Mining taking the decision to acquire the contractors' assets used at the mine.

The acquisition process includes obtaining the required takeover and other regulatory approvals, with MCM saying that the process could potentially be completed in the first quarter of the 2019 financial year.

The in-sourcing of the mining operation is expected to enhance asset management, which will result in improved availability, leading to higher RoM production.

The start of these in-sourcing negotiations have resulted in increased oversight of the mining operations at Uitkomst, which, in turn, resulted in the higher RoM production during the June quarter.

In addition, RoM coal purchased from third-party collieries and processed through or blended and sold at Uitkomst, also increased by 50% during the quarter to 13 265 t.

Sales from the Uitkomst RoM coal were up by 42% in the June quarter, to 90 509 t, while sales from purchased RoM coal to blend decreased by 19%, to 5 669 t.

MC Mining reported that the significantly higher sales tonnage combined with favourable coal prices during the quarter, resulted in Uitkomst generating higher-than-expected earnings before interest, taxes, depreciation and amortisation.

Revenue for the quarter also benefited from higher export coal prices, while costs per tonne reduced as a result of the 6% weakening in the South African rand against the US dollar during the period.

Revenue for the quarter reached $96.5-million, up 11% on the previous quarter.