MC Mining (MCM), the South African coal producer and development company, said it had taken out a R20m general banking facility for its Uitkomst Colliery, an operation it bought from Pan African Resources last year for R275m.
David Brown, CEO of MCM, said that whilst Uitkomst had proven to be a “highly profitable operation” it might be necessary to “… temporarily finance sustaining capital to secure its production profile” without providing details.
The facility, which has been raised from Rand Merchant Bank, a division of FirstRand Bank Limited, is subject to a floating coupon at the South African Prime rate (currently 10.0% per annum) less 0.5% and is a 12-month facility, which will be reviewed annually by RMB.
“The facility is a further milestone on the strategic journey the company has embarked on,” said Brown in a statement. MCM has made major strides in the four years Brown has been its CEO, removing a string of legacy issues ranging from unfavourable rail tariffs and court disputes to dispensing with unprofitable or low margin operations.
Most recently, the company re-scoped a metallurgical and thermal coal mining project called Makhado, situated in Limpopo province. The project is scoped to produce about 3.5 million tonnes of coal annual of metallurgical and thermal coal. It was recently granted all of its required regulatory approvals ahead of financing the enterprise, estimated to cost between R80m and R100m.
