South African coal producer MC Mining's (MCM) output fell by over a fifth in July-September compared with the previous quarter, and was more than a third lower than in the same period of last year.
Coal production of 90,069t of in July-September, the first quarter of MCM's 2025 financial year, fell by 21pc from 113,977t in April-June, and was 35pc lower compared with the same quarter a year earlier.
Coal sales during the quarter were 56,305t, split between 47,586t of high-grade duff and peas for the domestic market, and 8,719t of lower-quality middlings coal. Sales were down by 44pc from 100,074t a year earlier, with the lower volume contributing to a 67pc higher production cost per saleable tonne, at $98/t compared with $59/t a year earlier, MCM said.
The company also highlighted lower thermal coal pricing during the period, averaging $110/t, down from $108/t in the previous quarter and $109/t a year earlier.
MCM's production remains restricted by the continued shutdown of the Vele Aluwani mine, after the company scaled down its operations in January citing a "hardship clause" owing to high logistical costs. MCM is also awaiting studies for environmental and water use licences for its thermal and metallurgical Greater Soutpansberg Project (GSP), which are now expected to begin in January-June 2025, delayed from previous expectations of June-December 2024.
MCM is still pursuing development of the Makhado project, with expected metallurgical coal production to be more than 800,000 t/yr. The project completed its feasibility study in August 2022 and in October 2022 was declared ready to begin construction within a few months.
The company underwent an ownership change after Hong Kong-listed Kinetic Development agreed to buy 51pc of MCM's issued share capital in two tranches based on an implied share price of $0.2089, totalling $90mn. MCM received its first instalment of $12.97mn in September, with the remaining $77.03mn pending shareholder and regulatory approval. The investment is expected to help move the Makhado mine into the production phase and advance the Vele and GSP projects.
MCM has faced a difficult financial environment after major mining firms such as Anglo American and South32 exited South Africa's coal market. Asset management company Goldway Capital Investments bought an 80pc stake in MCM through a hostile takeover in April, valuing the firm at 800mn rand, or about $45.6mn. The Kinetic Development investment represents a significant valuation upgrade for the firm.
