MC Mining Keeps Makhado Coal Project Suspended Despite $8m Funding

MC Mining has announced that it will keep its Makhado coal project in Limpopo suspended while it reviews mining and processing requirements. The company secured a further $8m loan from its controlling shareholder, Kinetic Development Group (KDG), bringing the total funding agreed to $16m. This comes after operations at Makhado were initially suspended on October 1 while the company finalised its funding arrangements.

The loans will be settled through the issue of shares, subject to shareholder approval. According to MC Mining, the funding will cover the suspension period, the restructuring of the workforce, and a review of the mine's business plan. The company continues to engage with KDG and other potential funding parties to secure additional funding needed to restart Makhado.

Tests at the coal processing plant identified areas requiring improvements to mining and processing, including infrastructure feeding coal into the plant. However, the tests also showed that the plant could process raw coal and produce hard coking coal, used in steelmaking, and thermal coal, mainly used to generate electricity. MC Mining will reassess the mine plan, mining and processing requirements, outstanding infrastructure work, funding needs, and contractor arrangements.

A restart date for the Makhado project will depend on completing the necessary work and securing further funding. In the meantime, the company has invited qualifying South African employees to apply for voluntary separation packages and is considering further organisational changes, subject to consultation. No final decision has been made on compulsory retrenchments.

Operations at the Uitkomst and Vele collieries also remain suspended. MC Mining's board has decided to maintain the suspension while the company reviews its business plan and secures additional funding. The company's nonexecutive director, Christine He, resigned with effect from Monday. She was previously MD and CEO until July, when she moved to a nonexecutive director role.

The $8m loan from KDG brings the total funding agreed with the shareholder to $16m. MC Mining said it continues to engage with KDG and other potential funding parties to secure the additional funding needed to restart Makhado. The company is reviewing its mining and processing requirements to ensure a successful restart of the project.

The suspension of the Makhado project has resulted in significant changes to the company's operations. MC Mining is working to restructure its workforce and review its business plan to ensure a successful restart of the project. The company's future plans depend on securing additional funding and completing the necessary work to restart operations.

Key points

• MC Mining secures $8m loan from Kinetic Development Group to support suspended Makhado coal project
• Operations at Makhado, Uitkomst, and Vele collieries remain suspended
• Company reviews mining and processing requirements, workforce restructuring, and business plan to ensure successful restart