LONDON (Alliance News) - Bisichi Mining PLC Friday said that the planned increase in production at its South African coal mines was hit by heavy rainfall, but it continues to expect to return to acceptable levels of profitability in the second half of the year.
At the end of 2013, the coal miner's South African subsidiary began moving machinery to two of its most profitable pits in an effort to increase production from these areas and begin the development of a new reserve at its Blue nightingale site.
On Friday, the company said the plan has been held back by unusually heavy rainfall in the first quarter, but it still expects the mine to return to acceptable levels of profitability by the second half of 2014.
Bisichi Mining said the timing of the development of its new reserve at Blue Nightingale, which consists of roughly 2.3 million tonnes of coal being sold, continues as planned and it expects to start mining the reserve in the second half of the year.
The company also said its coal is still in demand, despite instability in the global coal market, although lower coal prices may continue for the whole of 2014.
"With new reserves to develop and strong demand for our coal we remain highly confident on the prospects of our coal mining activities in South Africa," it said in a statement.
The company warned in November that short-term production issues caused by a blockage at one of its South African coal mining subsidiary's main production pits would affect 2013 earnings. In April, it said that its pretax profit fell to GBP102,000 in 2013, from GBP2.2 million in 2012.
Bisichi Mining shares were down 3.6% to 106.00 pence Friday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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Bisichi (BISI)