29th Jan 2021 11:02
(Alliance News) - South African-based coal miner MC Mining Ltd on Friday reported a drop in fourth quarter coal production and coal sales as Covid-19 hit its workforce, while also dampening demand.
Uitkomst, the company's KwaZulu-Natal-based colliery, experienced a high level of absenteeism due to the pandemic, which resulted in a decline of run-of-mine coal production by 14% to 127,021 tonnes for three months to December, compared to 108,945 tonnes in the year before.
Despite the lower coal production, Uitkomst generated coal sales of 81,486 tonnes, 4% lower than 84,578 tonnes the prior year.
MC Mining, which is listed in Johannesburg and London, also said the Covid-19 crisis adversely affected global manufacturing activities and energy production, resulting in the average API4 prices, coal prices exported from South Africa, declining significantly in the first half of 2020.
The softer domestic-sized coal prices and lower API4 prices led to a 6% decline in revenue a tonne during the three months, said acting Chief Executive Officer Brenda Berlin, who is stepping down on February 15. MC Mining said an executive search is "advanced" and it expects to announce an appointment "shortly".
Uitkomst commenced with the retrenchment process during the quarter, resulting in 42 positions at the colliery being made redundant this month.
MC Mining also said negotiations with the state-owned Industrial Development Corporation to delay repayment on its loan were ongoing.
It seeks to extend the repayment period of the ZAR160 million facility, as well as accrued interest beyond November 30.
The company wants to align the repayment of the first drawdown of ZAR120 million with the positive cash flows generated by the Makhado Project, while the second drawdown of ZAR40 million will be repaid from capital planned to be raised for the construction of Phase one.
MC Mining previously secured a significant portion of the Makhado Phase 1 composite funding package, including a new ZAR245 million IDC facility and in-principle funding agreements for a further ZAR200 million.
The company continued its interactions with potential domestic and international funders for the remaining ZAR130 million for Makhado Phase 1 and anticipates that the process to secure the balance will be completed in first quarter 2021, with construction commencing shortly thereafter.
By Artwell Dlamini; [email protected]
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