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MCC revenues hit by lower volumes and yields

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World Coal,

Mountainside Coal Co.’s (MCC) sales revenues were hit in 2Q16 by lower volumes and yields of its speciality low-ash stoker coal from the Flat Creek coal mine in April and May.

Highwall mining operations were suspended in May as elevated iron levels were encountered in intermittent pockets of the coal, making the coal product unsuitable for sale as a premium silica-grade stoking coal. Highwall operations restarted in June at a new section of the mine.

Sales revenues were also hit by ongoing low prices for coal fines generated from the production of the stoker coal and by relatively high inventory levels at the end of June, a result of shipment timing to customers.

More positively, the company did secure an initial increase in the sales price of its stoker coal. MCC can supply up to 13 000 short tpm under its current contract.

Over the coming months, the company plans to increase its production volumes towards this target “in the most cost-effective manner” and to replace production from the Flat Creek mine, which will be exhausted by October.

To this end, company management has continued to explore existing leases and additional areas containing coal seams that are capable of replacing Flat Creek production.

MCC is majority-owned by White Energy Co.

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