Having acquired bauxite company Cape Alumina recently the company is rebranding itself as Metro Mining, because thermal coal prices have dipped to record lows below $70 per tonne and the Surat Basin Railway construction being postponed leaves Metro’s coal assets stranded.
“Notwithstanding the current state of the coal market the company, along with most coal industry commentators, expects the market upturn for coal and development of the Surat will occur towards the end of this decade,” MetroCoal said in its directors’ statement from yesterday’s AGM.
The company disbanded its exploration team late last year and replaced the full time position of company secretary and CFO with a part-timer last November; while the board was reduced from five directors to four.
The directors also wrote-down the value of the Columboola, Norwood and Dalby West tenements to nil, with the Bundi coal tenements partially impaired, writing down the value to $9.47 million due to project development delay and the decision to stop exploration and development expenditure.
However, the company said its coal tenements were “in good standing” having met all statutory expenditure obligations through to 2017, allowing MetroCoal to retain the tenements at minimal additional cost over the next few years.
While the company said it would ensure these projects and all other tenements were maintained in good standing, it cautioned that further evaluation and progress of the development of those assets relied on future thermal coal market conditions and the planned development of key rail and port infrastructure.
Its strategy in the coming year will focus on development of Cape Alumina’s Bauxite Hills project, along with ongoing assessment and evaluation of other opportunities in Australia and overseas.
The impairment of just over $16 million in relation to the exploration and evaluation expenditures led to a loss of over $17.6 million for the consolidated entity after income tax.
