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JOHANNESBURG – MC Mining, which was hit by operational challenges in the quarter to December, is sorting out the problems and expects better output in the year ahead, it said on Friday.

The stock traded 6.5percent weaker on the JSE on Friday to close at R11.50 a share.

Coal production fell by 20percent as production at the Uitkomst Colliery in northern KwaZulu-Natal dropped to 112562 tons in the second quarter which ended in December from 140501 tons a year earlier.

MC Mining chief executive David Brown blamed continuing equipment availability issues, incorporating ex-mining contractor staff into new systems and process challenges following the transition to owner mining in August last year.

“A number of shifts were lost due to these issues and corrective action has been implemented and improved production is expected in quarter three of the 2019 financial year,” Brown said.

MC Mining, formerly known as CoAL of Africa, has transitioned Uitkomst from contractor to the owner-operator model last August after paying $4.9million (R66.64m) to acquire the mining equipment from independent mining contractor Khethekile Mining.

The emerging metallurgical coal development agreed to employ 340 Khethekile employees currently working at the colliery, and also acquire the contractor's Newcastle office.

Brown acknowledged the integration, as well as the commissioning of additional equipment, affected run of mine production, and expected improvements during the March 2019 period.

“We also commenced with the construction of the course discard plant modifications during the quarter, and this expansion is expected to yield an additional 40000 tons of saleable product per year,” Brown said.

Uitkomst generated sales of 68359 tons from 142843 tons years earlier, with the company saying it had a further 7361 tons of saleable inventory that will be sold in the March 2019 quarter.

BUSINESS REPORT