Coal miner MC Mining has reported a loss after tax of $14.6-million for the financial year ended June 30, a 232% increase on the $4.4-million loss reported for the previous financial year.

Non-cash charges, which increased by 59% to $5.9-million, contributed to the loss. These charges include a net impairment expense of $900 000.

Moreover, depreciation and amortisation decreased by 5% to $1.9-million, while the share-based payment expense decreased by 22% to $700 000.

Revenue for the period decreased by 18% to $36.7-million and cost of sales decreased by 11% to $36.5-million resulting in a decrease in gross profit to nil, compared with $3.6-million in the prior year.

Additionally, an impairment of $900 000 was recorded in the current year relating to the Vele semisoft coking and thermal coal project, in Limpopo.

Administrative expenses increased by 73% to $15.4-million in the reporting period from $8.9-million in the prior period.

The company notes that employee expenses increased by 53% to $6.6-million following the increase in staff required to advance the Makhado steelmaking hard coking coal project.

Professional fees increased by 160% to $1.3-million and overhead expenses increased by 79% to $7-million owing to the increased activities at the Vele project.

Finance costs from borrowings and finance leases decreased by 12% to $1.5-million, while unrestricted cash balances at year-end totalled $200 000.

Net asset value decreased by 14% to $75.4-million from $87.4-million in the prior corresponding period.

MC Mining’s headline loss a share increased by 127% from $0.01 in the 2023 financial year to $0.03 in the year under review, while its basic and diluted loss a share increased by 143% from $0.01 in the 2023 financial year to $0.04 in the year under review

The company notes that no dividend was declared for the year ended June 30.

OPERATIONS
Meanwhile, the Uitkomst Colliery, in KwaZulu-Natal, produced 498 350 t of run-of-mine coal during the 12 months to June 30, 12% higher than the previous year.

MC Mining reports that Uitkomst sold 350 677 t of coal in the year under review comprising 340 203 t of premium duff and sized peas and 10 474 t of high ash, coarse discard coal.

Uitkomst generated sales revenue of $27.7-million for the year.

The Uitkomst net revenue per tonne decreased to $79/t, primarily owing to sales into the domestic market, whereas API4 coal prices were elevated in the first half of financial year 2023 during which time Uitkomst sold coal to exporters.

Moreover, the higher coal sales volumes contributed to the 48% decline in production costs per saleable tonne.

Further, MC Mining continued the Makhado project composite funding initiatives during the year and anticipates that the funding will be concluded in the second half of this calendar year.

“The various initiatives being investigated include amongst others, build, own, operate, transfer funding arrangements, additional senior debt as well as debt/equity instruments, coal prepayments and construction-based financing,” the company says.

Meanwhile, the Vele Aluwani Colliery produced 119 799 t of saleable thermal coal in the 2024 financial year.

MC Mining explains that Hlalethembeni Outsource Services (HOS) notified the company during December 2023 that owing to production challenges, combined with elevated logistics costs and the depressed API4 coal prices, it would exercise the hardship clause in the contract mining agreement.

This resulted in HOS downscaling operations, which was completed during January, and the commencement of a production optimisation review.

MC Mining says this review – Operation Shandukani – will likely result in, among others, changes to the mining methodology, as well as further modifications to the coal handling processing plant as well as securing access to rail transport at competitive prices.

The evaluation of these measures is expected to be completed in the first half of financial year 2025 and is expected to result in improved profitability at the colliery.

Further, MC Mining says exploration and development of the three Soutpansberg coalfield projects, namely the Chapudi, Mopane and Generaal project areas, in Limpopo, is planned to underpin the long-term growth of the company.

The company notes that the Department of Mineral Resources and Energy has granted mining rights for the three project areas comprising the Greater Soutpansberg Project (GSP), which collectively contain over seven-billion tonnes of inferred coal resources.

The company executed the mining rights for the Mopane, Generaal and Chapudi project areas during the 2024 financial year.

MC Mining says exploration and development of the GSP could position the company to be a significant steelmaking coal supplier for both the domestic and export markets.