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MC Mining COVID-19 update

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World Coal,

MC Mining Ltd has provided an update with regards to the impact on the company of the global COVID-19 pandemic. The company remains focused on taking the necessary precautions to prevent the spread of COVID-19 and reducing the threat to its employees, contractors and stakeholders.

Operations at the Uitkomst Colliery

The South African government directive dated 23 April 2020 provided for a phased, risk-based approach to reducing restrictions from level 5 to level 4 from 1 May 2020.

The Level 4 restrictions allowed the company to restart operations at its high-grade Uitkomst metallurgical and thermal coal mine on 4 May 2020, subject to the following limitations:

  1. Utilisation of 50% of that mine’s labour capacity.
  2. Adherence to detailed health and safety protocols.
  3. Introduction of workplace plans to enable disease surveillance at site and prevent the spread of infection.

The company is pleased to report the Uitkomst Colliery has successfully ramped-up production to the stipulated 50% labour capacity level since recommencing operations.

The company is also pleased to report strong customer demand for its products.

Effects of the Level 4 restrictions on MC Mining’s other sites

Activities at the company’s Makhado, Vele and Greater Soutpansberg Projects will remain closed until the South African government eases restrictions further. The ‘no work, no pay’ policy for non-essential staff remains in place, although a portion of wages continues to be paid to affected staff by the government’s Temporary Employee/Employer Relief Scheme. Where practical, the work-from-home policy will remain in place for essential staff until there is a further easing of lockdown restrictions.

Loan facilities

The company is in continuing negotiations with MC Mining Group financiers, including the Industrial Development Corporation of South Africa Ltd, regarding drawdown from existing facilities, potential new finance facilities and deferment of repayment dates. The company’s request for deferment of principal repayments is to bring such repayments in line with the revised cash flow forecasts brought about by the Covid-19 restrictions. Discussions to date have been positive and while still not finalised, the company expects a favourable outcome and will provide a further update once negotiations have been concluded.

MC Mining CEO, Brenda Berlin, commented: “I am very pleased with the smooth rampup to the 50% labour capacity level at the Uitkomst colliery and the continuing strong demand for its products from existing customers. I also acknowledge the continued support of our existing financiers and am looking forward to finalising negotiations in the short term.”

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South Africa coal news