JUNIOR coal producer MC Mining closed stronger on the JSE on Friday after reporting a staggering 368 percent growth in coal sales during the quarter ended June 2021 compared to a year earlier on the back of strong coal prices.
MC Mining, previously known as Coal of Africa, posted 90 858 tons of coal sales during the quarter up from 19 429 tons in 2020 comprising 84 834 tons of high grade metallurgical and thermal coal and 6 024 tons of lower grade middlings coal.
The group said the API4 coal price had averaged $105 (R1 533) a ton during the quarter compared to $55 a ton in the third quarter of the 2020 financial year and the price was forecast to remain high for the balance of 2021 as the post-pandemic world economic recovery fuels greater demand for coal.
MC Mining’s revenue a ton increased by 47 percent to $84.91 a ton from $57.88 a ton due to the much higher API4 coal prices recorded.
The group said the Uitkomst Colliery in KwaZulu-Natal generated 127 927 tons of mine coal during the quarter, 208 percent higher than in the comparative fourth quarter of the 2020 period.
“Production during the fourth quarter of the 2020 financial year was limited due to the South African government-imposed lockdown, introduced to reduce the spread of Covid-19, that resulted in the temporary suspension of activities at the colliery and its customers,” said MC Mining.
The company said coal sales to Uitkomst’s largest customer returned to normal levels during the quarter, following that customer experiencing equipment breakdowns during the third quarter of the 2021 financial year and compared to lower sales levels during the comparative Covid-19 lockdown period in the fourth quarter of the 2020 financial year.
The group said 70 percent of Uitmost’s operation had resumed last Monday after they were temporarily suspended amid the violent looting and burning of retail shops in KwaZulu-Natal.
The temporary suspension of operations resulted in the loss of three-and-half days of run of mine coal production, equating to 5 600 tons. The company said it was currently assessing mine plans with the objective of recovering some or all of the forgone production.
MC Mining is developing its flagship Makhado Project, which is expected to deliver positive returns for shareholders.
The group said the Industrial Development Corporation (IDC) had provided financial support for the development of Makhado and it had utilised an IDC loan of R160 million to progress Makhado to its fully-permitted status and to partially fund the acquisition of the surface rights over the project area.
“The IDC is also a 6.7 percent shareholder in MC Mining subsidiary, Baobab Mining & Exploration Ltd, the owner of the Makhado Project,” said the firm.
The share price closed on Friday 4.2 percent lower at R1.14.
BUSINESS REPORT ONLINE