JOHANNESBURG (miningweekly.com) – Diversified resources group Exxaro is considering stopping production at its New Clydesdale Colliery (NCC), in Mpumalanga, while it continues to seek a buyer for the mine.
The group has informed the relevant trade unions of its plans and a 60-day consultation process was now under way, potentially putting 402 jobs at risk.
Exxaro had initiated a divestment process for the operation in April, after an internal review of group coal assets determined that NCC was a negative-margin operation with a short mine life.
Since then, lower coal prices and exchange rate movements; mining difficulties that have led to increased mining costs at lower yields; and a shortfall of sales owing to the unique characteristics of the NCC siding, have placed the operation under further strain, prompting the group to consider halting operations.
Exxaro also on Thursday announced that it had recorded a R292-million pretax impairment loss on the carrying value of property, plant and equipment at NCC in the six months to June 30.
The group, which would publish its interim results on August 22, expected to report attributable interim earnings of between R1.98-billion and R2.29-billion, or attributable earnings a share of between R5.56 and R6.45.
This would be between 74% and 78% lower than attributable earnings in the previous half-year.
Further, headline earnings a share were expected to be between R6.27 and R7.27, representing a decrease of between 37% and 45% on that of the 2012 half-year.
Exxaro’s share price on the JSE fell by as much as 2.38%, but rebounded somewhat to trade at R150.66 a share by 15:00. This was down 1.29% on Wednesday’s close of R152.63.