MC Mining's share price rises 6.15% following Uitkomst Colliery turnaround strategy

MC Mining’s share price surged 6.15% after it announced a revised turnaround strategy for its Uitkomst Colliery subsidiary.

The share price shot up by 6.15% to R1.38 on Tuesday morning. A year ago, the share price was trading at R1.73.

In a statement on the JSE’s news service the company’s directors said the turnaround plan will see significant operational changes that position the colliery for a future growth phase.

Uitkomst Colliery, located in Kwazulu-Natal, is part of MC Mining's strategy of supporting South Africa's Steel Master Plan, whilst itself, becoming a significant regional supplier of steelmaking coal products. 

Uitkomst produces, for the steel industry, pulverized coal injection (PCI) and for the South African manufacturing industry, specialized, high quality-sized coal products, both of which reduce input costs and provide the domestic steel industry with much needed import substitution.

MC Mining's flagship project, the Makhado steelmaking hard coking coal Project, located in the Limpopo, and due for commissioning in December 2025, aims to be the largest, hard coking coal (HCC) producer in the country, where the steel industry currently imports its HCC needs.

The company said the turnaround plan was being implemented following an extensive due diligence, and consultations with labour organisations, service providers and regulators, and with the assistance of Metalla Tutum Engineering, a mining consultancy and engineering company.

Key focus areas of the turnaround plan are to reconfigure underground mining layouts to streamline operational efficiencies; implement handling and processing plant modifications to improve yields; reduce workforce numbers from 430 to 366, with minimal forced retrenchments; and enter into longer-term coal offtake agreements to stabilize price certainty.

The company said these changes should see Uitkomst improve the operations safety and health performance, reduce unit costs of saleable coal production to respond to the current low coal price environment and reduce the volatility in earnings.

"The inclusion of a seasoned mining contractor in MTE as turnaround advisors, to help drive forward the group's growth strategy, presents a compelling opportunity for MC Mining to secure a sustainable future for Uitkomst Colliery, whilst allowing us to focus the group's limited resources to bring Makhado to account this calendar year. We look forward to implementing this transformative collaboration," said MC Mining’s interim chairman Mathews Senosi.

In the third quarter to March 31, Makhado achieved milestones towards commissioning of the coal handling and preparation plant by December 2025, with construction of the CHPP being started, construction power in place with over 14km of overhead power lines erected and the temporary access bridged to the project site now serviceable.

Run-of-mine (ROM) coal production from the Uitkomst steelmaking and thermal coal mine was 13% lower than the March 2024 quarter at 101 101 tons. The reduction was due to lower than expected coal seam widths and lower mining fleet availability.

Uitkomst sold 56 320 tons of high-grade coal during the quarter and no sales of lower grade middlings coal. Coal preparation plant yields improved due to operational improvement initiatives to 73% from 60% over the period to help ameliorate some of the lower ROM coal production.