JOHANNESBURG (miningweekly.com) – Troubled coal miner Buffalo Coal said on Friday that it would continue to consider restructuring alternatives at its Dundee operations, in KwaZulu-Natal, and advised shareholders that it was under a TSX delisting review.
The dual-listed South Africa-focused company’s finances were under strain, despite a recent increase in productivity, which saw first-quarter production increasing by 53% quarter-on-quarter to 473 000 t.
Buffalo explained that previous underperformance by its largest business unit, Magdalena underground, the depletion of its opencast reserve and the continued reduction in export coal prices had impacted negatively on its current and forecast financial position. The company also lamented ongoing load-shedding by power utility Eskom.
Buffalo stated that, given its financial position, restructuring was necessary to cover operational cash flow shortfalls, thereby ensuring that the company remained sustainable in the future. A consultation process with organised labour and relevant stakeholders was under way.
Meanwhile, Buffalo reported that the TSX had placed the company under delisting review, and gave it until September 18 to comply with all requirements for continued listing. Failure to do so would result in the delisting of Buffalo’s securites within 30 days.