MC Mining suspends Makhado with restart funding still unsecured

Makhado suspension puts restart plan back under review

MC Mining Limited (ASX:MCM) has paused operations at its flagship Makhado Project, leaving the South African coal developer without a stated restart date and still seeking the money needed to resume production.

The decision follows C4 hot commissioning of Makhado's coal handling and preparation plant. The work demonstrated run-of-mine feed, coal washing and production of both hard coking coal and thermal coal, but also identified areas for optimisation in the mine and processing operation, including front-end feeder infrastructure. The plant achieved a demonstrated washing rate of approximately 7,600 tonnes per day, with hard coking coal quality of about 10% ash.

The suspension is an extension of the funding pressure already visible in the company's latest operational update. The October Makhado suspension had followed the end of the September quarter, when Makhado was undergoing commissioning and the company was relying on shareholder support to progress the project.

Second US$8 million bridge loan adds interim support

Controlling shareholder Kinetic Development Group has agreed to provide a second unsecured bridge loan of US$8 million. Together with the first US$8 million facility announced in August, the loans represent US$16 million of agreed capital support, although the related share issues still require shareholder approval.

Under the proposed settlement, the second loan's principal would be set off against the subscription price for 38,295,836 shares at US$0.2089 each. The loan carries interest at the Reserve Bank of Australia's outstanding business loan rate for medium businesses plus 3% a year, compounded monthly. The structure follows the August KDG funding agreement, which provided for bridge funding and a two-tranche share subscription.

MC Mining said the new funding, together with proceeds from product sales, is expected to cover the temporary suspension, workforce restructuring and business plan review. It has not, however, secured committed funding for the eventual restart. The review must address remaining capital expenditure, critical project work, contractor and operating arrangements, the mine plan and the timing of any return to production. Revenue from Makhado, other than the product sales already referred to, will not be generated while the project remains idle.

Workforce reductions and board change add pressure

The group has invited qualifying South African employees to apply for voluntary severance packages as part of its cost reduction and sustainability measures. Applications will be assessed against operational requirements, safety, regulatory obligations, critical skills and the future operating structure. MC Mining said no final decision had been made on compulsory retrenchments.

Yi (Christine) He has also resigned as a non-executive director, effective 9 November 2026. He had moved from managing director and chief executive officer to the board in July and served on the Audit and Risk Committee and Disclosure Committee. The board said it will consider its composition.

The next fixed point is shareholder consideration of the bridge loan share settlement at the 30 November annual general meeting, alongside the supplementary meeting materials. More consequential is what the business plan review produces: without additional committed funding and a workable operating model, the commissioning milestone remains a demonstration of capability rather than a route to sustained production.