JOHANNESBURG (miningweekly.com) – Production volumes for South African Coal Mining Holdings (SACMH) contracted to 401 366 t for the year ended December 31, 2012, owing to development work on the opencast area at the Vlakfontein operation and the underground area at Mooifontein having been undertaken, the company reported on Tuesday.

Output for the year was less than half the 811 302 t recorded for the previous year.

The company bought in a further 86 604 t of run-of-mine coal from third parties to supplement its own production during the latter half of the year; however, exported volumes for the year reduced to 303 384 t at an average of $90.76/t.

This was less than the $95.20/t achieved for the 379 552 t exported in 2011.

In contrast, the average cost a ton for the period improved to R673/t from R899/t the previous year which, despite the lower volumes, resulted in the group reporting a gross margin of R20-million or 8.92% of turnover.     

SACMH attributed the improvement to lower costs in underground operations compared with the opencast operations, which produced the bulk of volumes in 2012.

Operational Suspension
Meanwhile, plans to start mining the Voorslag underground area were suspended as a result of delays in the approval of the water-use licence application submitted to the Department of Mineral Resources.

To date, no commitment had been received regarding the approval and, consequently, on completion of underground mining operations at Mooifontein, operations were suspended at the end of November.          

To curtail costs as a result of the limited income while the operation is on care and maintenance, a retrenchment programme at Mooifontein was implemented and a total of 66 staff were retrenched, and agreements with existing service providers at the operation were terminated.

A small staff complement had been retained to ensure that existing assets were adequately safeguarded and that all statutory and environmental regulations were complied with during the period.

The company said it would, together with its major shareholder, actively pursue various strategic transactions to address the group’s long-term sustainability, as well as its black economic-empowerment status.

The group narrowed its headline loss to R52-million for the year, compared with the headline loss of R93.46-million in 2011.

Revenue for the year, however, dipped from R347.38-million in the prior year to R224.16-million in 2012.