Whoever takes the baton from Berlin will have to resolve the issue of funding the first phase of MC Mining’s Makhado coking and thermal coal project.
There seemed no better person to solve MC Mining’s problems - which are about project financing - than Brenda Berlin, the former CFO of Impala Platinum. Unfortunately, Berlin - who is the firm’s interim CEO - decided to step down from mid-February. That makes the question of succession the responsibility of MC Mining’s chairman, Bernard Pryor. His plan was for a new permanent CEO appointment in sufficient time for the handover of executive duties.
However, it’s the last week of January and we haven’t heard a peep from MC Mining. In any event, whoever takes the baton from Berlin will have to resolve the issue of funding the first phase of MC Mining’s Makhado coking and thermal coal project, a 1.1 million ton a year endeavour situated in South Africa’s Limpopo province. In a nutshell, MC Mining is hoping to match repayment of a portion of initial debt raised from the Industrial Development Corporation (IDC), the state-owned finance development institution, against future cash flow and as a precursor to raising a larger debt package in which the IDC will also participate. It’s project finance at its rarified best, but the takeaway is that the IDC remains supportive of Makhado despite recently drawing back the reins on its own spending mandate after reporting a R3.2bn year-end loss in October.
In the meantime, Pryor is hoping that the conversion to owner mining at Uitkomst, the firm’s only operating asset, will ease some balance sheet pressure. It’s tough, though: the coal market is volatile and although prices have improved, Uitkomst - a mine in KwaZulu Natal province - has proven difficult to tame. It was cuts all round at MC Mining in the first half of 2020 with no-one but essential staff getting paid.
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