The South-Africa focused company processed 3.4Mt to produce 2.6Mt of saleable coal during the year ended June 30, a 17% drop on the same period last year.
In line with this, coal sales fell 25% year-on-year, which the company said was due to a force majeure declared after a Maputo rail corridor derailment and the depletion of its Vuna colliery.
Due to the reduced rail capacity, combined export sales through Mozambique's Matola Terminal fell 37% to 1.04Mt and export-quality sales to the inland market fell 41% to 542,103Mt.
Sales to state-owned power utility Eskom rose 22% to 958,194Mt as the country struggled to meet demand for electricity.
CoAL declared force majeure at its Mooiplaats, Vele and Woestalleen collieries from mid-February to May while a bridge on the Maputo rail corridor was repaired after being damaged by a derailed train.
Decreased production hit earnings for the year with revenue down from $A242.5 million in 2012 to $145.5 million this financial year.
The company widened its losses from $138.9 million in FY2012 to $148.2 million in FY2013 and closes the year with $29.9 million cash in the bank.
CoAL executive chairman David Brown said that despite turbulent operating, market and labour conditions, the company managed to achieve a number of significant milestones, including securing a number of non-core asset sales.
The tri-listed company’s Woestalleen complex produced 2.5Mt ROM coal during the year, down 30% on 2012. The complex comprises of three beneficiation plants and the Vuna colliery, where a depleted resource has led CoAL to sell the complex.
“The company has formally agreed to sell the Woestalleen Complex (excluding the Opgoedenhoop NOMR) to a consortium of investors and the asset is disclosed as an “operation held for sale” in the financial statements,” CoAL said.
“The purchasers are in the process of providing the Company with satisfactory proof of funding and the relevant legislative approvals have been or will be submitted.”
The Mooiplaats thermal coal colliery also struggled to meet the prior year’s production levels due to “challenging geological conditions”. The colliery produced 755,251Mt of ROM coal during the year, down 38% on 2012 levels.
“The labour unrest in the South African mining industry affected production and Mooiplaats experienced a wage related strike in September and October 2012 while the February 2013 force majeure declaration resulted in the colliery becoming a middlings only colliery and all coal produced was sold to the state power utility, Eskom.”
CoAL said Mooiplaats had not performed in line with management’s expectations and continued to experience constrained production output, remaining unprofitable. As such, it has also been put up for sale with a formal process to begin this month.
The sales are part of the company’s “new management plan”, which saw it reshuffle its executive team, cut the majority of its staff and put five “non-core” assets up for sale.
CoAL is now endeavoring to reposition itself from a loss-making miner to a project development company with several promising projects on the horizon.
CoAL has the Makhado and MbeuYashu projects in the exploration and approvals stage, with the Makhado DFS completed during the year indicating the project has 344.8Mt of coal in situ for a 16-year life of mine.
The silver lining in the company’s otherwise gloomy production reports was its Vele thermal and coking coal colliery, which managed to more than triple ROM production to 536,846Mt, despite two force majeures.
The company has received board approval for the expansion of Vele and aims to begin construction by the end of Q12014 for a 2015 production start.
