MC Mining narrows interim loss while advancing flagship Makhado project

JSE-listed coal producer MC Mining has reported a modest improvement in its interim financial performance while continuing to advance its flagship Makhado Project, which is expected to position the company as a significant producer of premium hard coking coal in South Africa.

The company, previously known as Coal of Africa, reported that its attributable loss for the six months to December 31 improved by 2% to $8.1-million, or 1.22 cents a share, reflecting cost management efforts despite operational pressures.

Revenue for the period declined by 22% to $6.6 million as sales volumes at the Uitkomst Colliery decreased amid geological challenges and softer thermal coal prices. Cost of sales dropped by 12% to $11.1 million, resulting in a gross loss of $4.5 million, slightly higher than the $4.2-million loss reported in the same period last year.

Administrative expenses edged up by 3% to $4.5 million, while finance costs were significantly reduced, falling by 55% to $0.4 million. Cash and cash equivalents stood at $2.9 million at the end of December, compared with $7.4 million on June 30, 2025.

Despite the lower revenue, the company strengthened its balance sheet, with net asset value increasing by 23% to $101.9 million. Headline loss per share improved by 33%, narrowing from 1.83 cents to 1.22 cents. No dividend was declared for the interim period.

In a strategic move to stabilise finances, the board approved the temporary suspension, or “hibernation”, of mining and processing operations at the Uitkomst colliery on February 2, 2026, with an intended effective date of March 1, subject to regulatory and labour processes.

The suspension is aimed at reducing ongoing cash losses while preserving the option to restart the operation when market conditions improve.

Production at the metallurgical and thermal coal mine fell by 24% to 140,121 t during the first half of the financial year. Own run-of-mine sales volumes declined by 20% to 87,447 t, while middling’s sales dropped completely to 12,995 t. At the same time, production costs per saleable ton rose by 20% to R111, reflecting the impact of lower output.

High-quality coal stockpiles at Uitkomst stood at 1,057 t at the end of December 2025, compared with 1,799 t a year earlier. The mine generated $6.6 million in revenue during the period, down from $8.4 million previously, although revenue per ton improved to $75 from $69 owing to a stronger product mix and market pricing.

While Uitkomst faces near-term challenges, the company’s development momentum remains firmly focused on the Makhado project. The coal handling and preparation plant is expected to enter hot commissioning in April 2026, marking a significant milestone for the project.

To date, about 1.3-million bench cubic metres of overburden have been mined to expose run-of-mine coal ahead of commissioning. Steelwork, mechanical installations and equipment installations at the processing plant have progressed steadily, while the permanent access bridge across the Mutamba River has already been commissioned.

Construction of a 14 km, 22 kV overhead power line is also advancing, including the delivery of transformers needed to support future operations.

Meanwhile, operations at the Vele Aluwani Colliery remain suspended while a re-engineered business plan is finalised. Remaining finished product stockpiles at the operation were disposed of at a nominal value during the reporting period.

Within the Greater Soutpansberg Projects portfolio, the company said it is prioritising areas for future development while preparing environmental and water licence applications expected to progress during the first half of the year.

MC Mining also continued to reduce its debt, making a further R20-million repayment on its loan from the Industrial Development Corporation. The outstanding balance on the facility stood at R180-million at December 31.

Leadership at the company changed during the period with the appointment of Yi (Christine) He as MD and CEO, effective October 1, 2025.

With the Makhado project approaching a key commissioning phase, the company believes it is laying the groundwork for its next stage of growth in South Africa’s metallurgical coal sector.