Run-of-mine coal production at MC Mining’s Uitkomst colliery increased to 125 153 t in the quarter ended September 30, compared with the 125 108 t produced in the comparable quarter of the prior year.

Third-party coal purchases for the quarter, which is the first quarter of MC’s 2019 financial year, were 12 466 t, compared with 45 313 t in the prior comparable quarter, as a result of the expiry of a supply contract during the year.

Sales of metallurgical, high-quality and blended thermal coal mined at Uitkomst increased during the quarter to 89 846 t, compared with 80 677 t in the prior comparable quarter.

Sales from coal bought for blending or processing declined to 5 282 t from 48 266 t in the comparable quarter last year, as a result of the expiry of the supply contract.

MC Mining on Wednesday reported that favourable thermal coal prices had resulted in average revenue per saleable tonne from Uitkomst of $87.39 during the quarter, compared with $50.03  in the comparable quarter last year and $96.52 in the quarter ended June 30.

Meanwhile, Uitkomst transitioned to an owner-operated colliery, with the acquisition of the underground mining contractor, Khethekile Mining.

During the reporting period, the company signed a heads of agreement with China Railway International Group for the facilitation of a funding package of up to 85% of the engineering, procurement and construction (EPC) contract value for the Makhado hard coking and thermal coal project and the negotiation of the EPC contract and mining contract.

The company has received environmental authorisation for the Makhado project, allowing for the transport of coal by road, rather than rail, as was initially planned; however, the authorisation was subsequently appealed and suspended.

Additionally, MC has entered into a coal purchase agreement with Chinese State-owned enterprise Huadong Coal Trading Centre, for coal from the Makhado project once it comes on stream.

The construction of the Makhado project requires MC to obtain access to two key properties to complete geotechnical drilling to confirm the positioning of processing plant infrastructure.

Access to the properties has been delayed, as a result of opposition to the government-managed land claims process. MC has, however, embarked on a legal process to enforce its rights under South African mining legislation.

The Vele coking and thermal coal colliery remained on care and maintenance during the quarter.