- Says restart is short-term arrangement pending payment to Jarcon
- Mining stopped last month due to overdue payments
- Says reduction of economic activity in the villages a factor in restarting
Minergy Limited has come to an arrangement to restart the mine with its mining contractor, Jarcon Opencast Mining Botswana (Pty) Ltd, the company has announced.
This comes after Jarcon downed tools earlier last month owing to overdue payments. “This is strictly undertaken in the spirit of being extremely conscious, aware and sensitive to job losses as well job reductions,” the company said in a statement released recently.
Loyalty to customers
“We also wanted to avoid the loss or reduction of economic activity in the villages and surrounding areas and we also realised the continued need to continue to support the very loyal customer base.”
The Minergy statement shows that the restart of mining operations is a short-term arrangement pending payment of overdue balances to Jarcon and discussions with various funding parties.
“These issues remain crucial and are urgently being pursued by Minergy,” reads the statement from the coal mining and trading company that owns Masama Coal Mine at Mmamabule Coal Fields near the village of Mmaphashalala in the Central District.
According to the statement, operations were scheduled to start on Monday this week. “This will not be at full capacity but rather at a reduced level,” says the statement.
“The start-up of operations is in line with robust cost reviews and significant cost reductions identified to reduce the saleable cost of coal to ensure a viable operation. These cost reductions will be stringently implemented and monitored.”
This is the company whose financial results for the six months ended 31 December 2022 (released recently) show that it attained remarkable improvement against the comparative six-month period.
“Notably, Minergy reduced its net loss before taxation by 37 percent from P91 million for the comparative six-month period to P58 million for the interim period, thanks to increased revenue,” reads the company’s financials.
“For the first time, the company produced operating and EBITDA profit.
There was a remarkable improvement in revenue, with the high global demand for coal experienced during the interim period at higher sales prices supporting exports through Walvis Bay.”
In the period under review, Minergy’s mining operations and plant performance have consistently achieved full production capacity. “Across the plant and mining operations, an average of 125 000 tpm had been achieved during the period,” the company says.
“This is a significant milestone for Minergy. In line with the growth in sales, mining and plant feed volumes increased by 50 percent against the comparative six-month period.
“Minergy has invested in work in progress (overburden removal or pre-stripping) to increase production and access additional coal in anticipation of increased sales, which has now had an impact on cash flows in the absence of the export market volumes as discussed later.”