MC Mining: Uitkomst Colliery returns to steady-state production

MC Mining, in its Report For The Quarter Ended 30 September 2020, says Uitkomst metallurgical and thermal coal mine generated 137,284 tonnes (FY2020 Q1: 135,675t) of run-of-mine (ROM) coal, a 1% improvement on the comparative period to end September 2019;

Uitkomst produces high-grade metallurgical, thermal and high-ash middlings coal and the colliery’s largest customer, experienced operational challenges at its Newcastle furnaces during September, which limited volumes purchased from Uitkomst.

Coal sales were 25% lower than for the comparative period in 2020 (FY2021 Q1: 57,616t vs. FY2020 Q1: 77,243t) with 20,667t of saleable coal on hand (FY2020 Q1: 8,864t) at the end of the Quarter; and limited activities continued at the Company’s Makhado hard coking coal project, Vele semi-soft coking and thermal coal colliery and Greater Soutpansberg Projects (GSP) following the COVID-19 lockdown.

“The South African Government declared a nationwide lockdown in March 2020 to limit the potential spread of the virus and the Company has implemented measures to minimise the risk of COVID-19 transmission on our sites. The progressive easing of lockdown measures, allowed the Uitkomst Colliery to return to steady-state production, while international coal prices trended positively during September and October 2020,” commented Brenda Berlin, Acting CEO.

COAL MARKET AND FINANCIAL FEATURES

The COVID-19 pandemic resulted in a significant decline in API4 export thermal coal prices but these did start to recover at the end of the Quarter but remained 10% below the comparative September 2019 period ($55/t vs. $61/t).

Restructuring of the March 2017 Industrial Development Corporation facility allowed for the drawdown of R40 million ($2.4 million) to advance the Makhado Project and delaying the repayment of funds utilised under this facility until 30 November 2020.

Available cash at Quarter-end was $1.6 million ($0.4 million at the end of June 2020) and restricted cash of $0.03 million.

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