Operational review of MC Mining’s Uitkomst Colliery
At Uitkomst Colliery, Utrecht, KwaZulu-Natal (84% owned) safety continues to be a key focus. No lost-time injuries (LTIs) were reported at the Uitkomst metallurgical and thermal coal colliery (Uitkomst Colliery or Uitkomst) during the Period (FY2023 H1: three LTIs).
The Uitkomst Colliery comprises the existing underground coal mine with a planned life of mine (LOM) extension directly to the north of current operations and the colliery has approximately 16 years remaining LOM. The LOM extension requires the development of adit 2k (horizontal shaft) and the development is subject to receipt of the regulatory approvals, available funds and prevailing market conditions.
Uitkomst sells a 0 to 40mm (duff) product into the metallurgical domestic market for use as pulverised coal. Uitkomst supplies sized coal (peas) products to local energy generation facilities and also sells smaller volumes of a high-ash, coarse discard coal (middlings) product.
Uitkomst’s run of mine (ROM) coal production for the six months increased by 20% to 268,464 tonnes(t) (H1 FY2023: 225,389 t) following the introduction of the Operation Phenduka optimisation strategy during June 2023. The colliery had inventory of 14,422t (FY2023: 50,490t) at the end of the period. Uitkomst sold 202,715t (FY2023 H1: 104,855t) of coal during the six months – primarily consisting of 202,340t of high-grade peas and duff (H1 FY2023: 98,924t). The colliery also sold 375t of lower grade middlings coal (H1 FY2023: 5,931t).
International thermal coal prices remained under pressure during the period and the average API4 export coal price for the six months was $112/t (H1 FY2023: $265/t). Despite the depressed coal prices, Uitkomst Colliery generated pleasing results for the period with revenue of $16.3 million (H1 FY2023: $14.0 million), yielding a gross profit of $1.5 million (H1 FY2023: $3.9 million) and operating cash flows of $5.1 million (H1 FY2023: $0.1 million) with net working capital of $1.4 million (FY2023: $6.3 million) at the end of December 2023.
