(Alliance News) - MC Mining Ltd said Thursday the production and sales of its run-of-mine coal dropped in the first quarter of its financial year, due to a substantial decline in coal prices.
For the three months to the end of September, the Johannesburg and London-listed miner produced 135,675 tonnes of run-of-mine coal, down 1% from 137,619 tonnes the same period the year before.
Uitkomst mine production in the quarter rose by 8%, but no coal to blend was purchased in the period due to the expiry of supply contracts.
Sales also dropped by 19% to 77,243 tonnes from 95,128 tonnes the prior year, as the average API4 coal price dropped by 40% to USD61 per tonne in the period, compared to USD102 the year before on reduced demand.
The drop in coal prices and change in sales mix led to a 25% drop in revenue per tonne to USD65.58 from USD87.39 the prior year, even as production costs fell by 17% to USD38.18 per tonne from USD46.12.
"The optimisation initiatives implemented at the Uitkomst colliery earlier in 2019 yielded positive results and ROM coal production pleasingly improved 8% on the comparative three-months. The initiatives have led to a more predictable production profile and the colliery is assessing various potential marketing opportunities to maximise returns from Uitkomst's metallurgical and thermal coal. Uitkomst is also currently reviewing its cost base to ensure this is aligned with the its production profile," said Chief Executive Officer David Brown.
Shares in MC Mining were untraded at 29.50 pence in London, as were its Johannesburg shares on Thursday at ZAR5.80.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Mc Mining (MCM)