Coal producer to raise funds for its Makhado mine after posting losses

JOHANNESBURG – MC Mining, formerly known as Coal of Africa, is considering issuing new equity to fund its Makhado mine after reporting widening interim losses, as coal prices plummeted 30percent amid pressure on gas prices.

The company on Friday reported that its losses during the half-year to December had widened to $7.1million (R114.74m) or 4.95cents a share, compared to a loss of $3.6m or 2.49c per share, a year earlier. The company said the 30percent decline in API4 coal prices resulted in revenue falling to $11.4m from $15.2m previously.

Gross profit declined to $300m from $2.9m.

Acting chief executive Brenda Berlin said the company was considering issuing new equity to existing shareholders in a bid to raise the $20m balance required for the construction of phase 1 of the Makhado thermal coal mine.

Berlin would also explore debt funding coupled with contractor funding to raise funding for the $37m required to develop phase 1 of the Makhado mine.