Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – Coal miner Universal Coal increased its domestic sales for the third quarter, ended March 31, by 24% to 432 251 t, compared with the 348 476 t sold in the quarter ended December 2014.
Export sales also increased by 68% quarter-on-quarter to 29 761 t from 17 728 t in the previous quarter.
During the quarter, the Kangala colliery, in Mpumalanga, reached steady-state operations and exceeded projected outputs, while also processing a milestone two-million tonnes of coal.
Universal stated that its New Clydesdale Colliery (NCC) project was still awaiting Ministerial approvals in terms of Section 11 prior to mine development.
Subsequent to the end of the quarter, the NCC’s reserves estimate increased by 289% to 40.75-million tons, while the resources estimate increased by 20% to 165.4-million tons, the company noted.
The group recorded cash generated from operations excluding interest of A$3.3- million for the quarter and group earnings before interest, taxes, depreciation and amortisation exceeded A$5-million for the quarter.
CEO Tony Weber said, during the quarter, local sales were affected by the fact that distribution was primarily dependent on State-owned power utility Eskom.
“This meant that if there was a delay in distribution owing to factors beyond our control, the entire distribution cycle was affected. The importance of distribution cannot be underestimated,” he stressed.
Weber explained that, for a company like Universal, the first challenge was to get the coal out of the ground, but the second was to deliver it to its customers in the correct quantities and on time.
“This has been a major focus for the company during this quarter and it has met and exceeded its targets in this aspect of its business,” he said.
Weber pointed out that, globally, junior miners were being “decimated” by fluctuations in the price of commodities.
However, he highlighted that Universal’s robust business model acted as a buffer against the uncertainties this had generated, as the company delivered positive cash flow independent of the macro environment for coal.
“Accordingly, our results are counter-cyclical, as we have been able to shield ourselves against the effects of falling commodities pricing.
“We are proud to announce the growth in our sales figures and also that plans to begin operations at NCC are on track. We are equally proud to announce that we are meeting our obligations to investors on schedule, making a tangible difference to the communities in which we operate, and maintaining a good record when it comes to environmental impact management,” Weber concluded.