(Alliance News) - Bens Creek Group PLC shares on Friday plummeted after it reported that it has laid off 44 Bens Creek Operations WV LLC employees.
Shares in Bens Creek were down 26% at 0.63 pence each in London on Friday morning.
The owner and operator of metallurgical coal mines across North America said that the move is due to "the depressed metallurgical coal price", as well as "financial constraints at the company and production difficulties", at its mining project in West Virginia.
Bens Creek added that the mine will be operated on a care and maintenance basis for the time being.
This comes after the company announced on Monday that its wholly-owned subsidiary, Bens Creek WV, had signed another coal contract with Avani Resources Pte Ltd, for 20,000 tonnes of spec coal following a tough start to 2024.
Avani is a Singapore-based energy commodity trader, and Bens Creek's largest shareholder with a 30% stake.
Under the terms of the agreement, Avani had agreed to pay USD60 per tonne for the coal, USD50 per tonne of which has already been received as an advanced payment. The remaining USD10 per tonne will be paid upon delivery.
Bens Creek said that the coal being delivered "does not meet the chemical construction required to meet the definition of High Vol A or High Vol B metallurgical coal".
Bens Creek added that lower coal prices and interruptions in production at the mine in West Virginia had put a strain on the company's cashflow in the first months of 2024.
While its West Virginia mine is once again operational, Bens Creek said that the company is operating at a reduced production capacity of between 30,000 and 35,000 tonnes per month.
These pressures resulted in Avani providing Bens Creek with a USD10.0 million working capital facility in February, which was fully drawn down in March.
Bens Creek also entered a long-term offtake agreement with the shareholder in February for the delivery of around 400,000 tonnes of Bens Creek's High Vol B Metallurgical coal.
The latest one-off coal purchase does not form part of this offtake agreement, Bens Creek said.
By Sabrina Penty, Alliance News reporter
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Bens Creek (BEN)