(Alliance News) - MC Mining Ltd on Friday said it has signed an agreement to outsource its Vele colliery to Hlalethembeni Outsourcing Services Pty Ltd HOS.
The company said the Vele colliery, in the Thuli coalfield in South Africa, will be outsourced as the MC Mining focuses on its flagship Makhado project. The company said the Vele colliery has a life of mine in excess of 40 years.
MC Mining is a coal exploration, development and mining company operating in South Africa. Its key projects include the Uitkomst Colliery, Makhado Project, Vele Colliery, and the Greater Soutpansberg Projects.
MC Mining said the outsourcing contract is on an exclusive basis for an initial five year period until December 2027. HOS is targeting monthly production of 60,000 tonnes of saleable thermal coal from Vele, MC Mining said.
The first coal sales from the Vele project are expected in the first quarter of 2023, the company said, with a ramp-up in production expected during the second quarter.
Chief Executive Officer Godfrey Gomwe said there was "significant capital and technical investment required to optimise production at the Vele Colliery and the outsourcing of operations at the colliery has been identified as the optimal strategy in the short and medium-term."
MC Mining shares were up 12% 14.86 pence per share on Friday morning in London.
By Harvey Dorset, Alliance News reporter
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Mc Mining (MCM)