JOHANNESBURG - MC Mining reported on Friday that production at its Uitkomst Colliery in Mpumalanga had taken a hit during the quarter ended December owing to the Covid-19 pandemic.
MC Mining, formerly known as Coal of Africa, said the numerous Covid-19 screening and isolation measures at the colliery had resulted to a reduction in the total hours worked, leading to a 14 percent decline in run of mine (ROM) coal production to 108 945 tons during the quarter versus 127 021 tons in the previous quarter.
Acting chief executive Brenda Berlin said the group had implemented various measures to mitigate the risk of Covid-19 transmission at all of its sites, with employees and contractors screened daily for Covid-19 symptoms.
“The effects of Covid-19 resulted in the Uitkomst Colliery recording a higher incidence of absenteeism compared to the second quarter of the 2020 financial year and ROM coal production was 14 percent lower than the comparative December 2019 period,”Berlin said.
Berlin said Uitkomst sold a portion of its coal at API4 index-linked prices and the colliery benefited from the improvements in API4 coal prices during the period.
Average API4 coal prices improved during the quarter but were 4 percent lower than the comparative period in the 2020 financial year to $73 (R) a ton versus $76 a ton.
Uitkomst commenced with a Section 189 restructuring process during the quarter, resulting in 42 positions at the colliery being made redundant in January 2021.
MC Mining said talks with the state-owned Industrial Development Corporation (IDC) to delay repayment on its loan were ongoing.
The group is seeking to extend the repayment period of the R160 million facility, as well as accrued interest beyond November 30.
MC Mining wants to align the repayment of the first draw-down of R120 million with the positive cash flows generated by the Makhado Project, while the second draw-down of R40m would be repaid from capital planned to be raised for the construction of Phase 1.
“MC Mining is confident that a satisfactory position can be reached with the IDC. In the unlikely event that the parties cannot reach agreement on further deferment terms, the financing documentation allows for the debt to be converted into equity,” said the group.
It said the IDC had reiterated its support for the development of the Makhado Project and it was confident that a satisfactory position would be reached.
The share was untraded on Friday.
BUSINESS REPORT