Cash Crunch and Production Woes Challenge MC Mining’s Growth Prospects

Operational Highlights and Safety

MC Mining Limited has delivered a mixed quarterly update for the three months ending December 2025. The company’s flagship Makhado steelmaking hard coking coal project in Limpopo Province continues to advance steadily, with hot commissioning activities for its coal handling and preparation plant scheduled to commence by March 2026. This milestone marks a significant step towards bringing South Africa’s largest hard coking coal producer into operation.

Safety remains a cornerstone of MC Mining’s operations, with the Makhado Project achieving an impressive 1,005 days without a lost time injury (LTI), reflecting a strong commitment to workplace health and safety. The workforce now numbers over 1,000, with a notable inclusion of local community members, underscoring the company’s social engagement efforts.

Uitkomst Colliery Challenges

In contrast, the Uitkomst Colliery in KwaZulu Natal Province has faced operational headwinds. Despite implementing a turnaround plan aimed at improving performance, production volumes fell sharply by 40% compared to the same quarter last year, reaching just 57,606 tonnes of run-of-mine coal. Factors contributing to this decline include geological intrusions, wetter mining conditions, and equipment availability issues linked to an ageing fleet.

While overhead cost reductions have been realised, these have not translated into production gains, prompting further strategic reviews. The colliery’s production costs per saleable tonne increased by 32% year-on-year, reflecting the impact of lower volumes on unit economics. Sales of high-grade coal also dropped by 34%, with no sales recorded for lower-grade middlings coal during the quarter.

Vele Colliery and Greater Soutpansberg Projects

The Vele Colliery remains suspended as MC Mining undertakes a comprehensive reassessment of its business plan and logistics solutions. Meanwhile, the Greater Soutpansberg Projects, satellite tenements adjacent to Makhado, continue to be evaluated and prioritised for future development. Negotiations for surface land access are progressing, and environmental licensing efforts are expected to ramp up in the first half of 2026.

Financial Position and Corporate Developments

MC Mining’s cash position tightened significantly during the quarter, with available cash and facilities falling to US$2.9 million from US$13.2 million in the previous quarter. The company received a US$7 million payment from Kinetic Development Group Limited under a share subscription agreement, providing some liquidity relief. Additionally, MC Mining continued repaying its Industrial Development Corporation loan, reducing debt by ZAR10 million.

Corporate governance saw changes with the appointment of Jianheng (Albert) Deng as a Non-Executive Director, replacing Zhen (Brian) He who resigned during the quarter. These board changes may signal a strategic shift or fresh perspectives as the company navigates operational challenges and project milestones.

Looking Ahead

With the Makhado Project nearing commissioning, MC Mining is poised to unlock significant production capacity in the coming months. However, the ongoing struggles at Uitkomst and the suspended status of Vele introduce uncertainties around near-term production and profitability. The company’s limited cash reserves also raise questions about funding sufficiency as it pushes forward with development and operational improvements.