JSE- and ASX-listed MC Mining has reported 18% lower metallurgical and thermal coal run-of-mine (RoM) volumes in the quarter ended March 31, compared with the same quarter of last year, owing to challenging geological conditions, floods and loadshedding at the Uitkomst Colliery, in KwaZulu-Natal.
The RoM output of the latest quarter, at 101 616 t, compares with 124 144 t in the corresponding quarter.
MC Mining recorded 78 032 t of coal sales in the quarter under review, compared with 71 361 t sold in the prior comparable quarter.
About 23 000 t of the coal sales comprised high-grade domestic coal sales, while lower-grade middlings coal and coal exports comprised 2 800 t and 51 900 t, respectively,
The company had 35 103 t of high-grade coal at the colliery and 4 872 t of stock at the port at the end of the quarter.
MC Mining owns 84% of Uitkomst’s operating company, Utrect Coalfields.
The company explains that the Uitkomst Colliery has back-up diesel generators, but these are only sufficient for underground mining operations and the switch from Eskom to internally generated power affects both underground and surface operations.
Meanwhile, MC Mining has put into action a detailed implementation plan for the construction and first five years of mining at the Makhado hard coking coal project, in the Southpansberg coalfield of Limpopo.
The company recently optimised the Makhado development plan, with higher yearly RoM production and coal handling capacity, which enhanced the project’s economics further.
The project is poised to be built in the second half of the year, with construction expected to take 18 months.
The revised mine plan states the East Pit will be mined first and RoM coal production will increase from 3.2-million tonnes a year to 4-million tonnes a year. Makhado is therefore expected to produce an average 880 000 t/y of coal.
This while mining and processing of coal at the outsourced Vele Aluwani Colliery has ramped up, following the recommissioning of the mine in December last year. The operation delivered 48 581 t of thermal coal in the quarter under review.
MC Mining comments that thermal coal prices declined sharply in the reporting period, averaging $146/t in the three months ended March 31, compared with an average thermal coal price of $273/t experienced in the first half of last year.
In turn, hard coking coal prices remain elevated at $344/t in the quarter, on average.
MC Mining had $14-million of cash and available facilities on hand as of March 31.