Continental ramps up Ferreira production

SOUTH Africa-focused Continental Coal has increased run-of-mine production from its Ferreira thermal coal mine after appointing a new mining contractor and starting development of the northern pit open cast operations.
Continental ramps up Ferreira production Continental ramps up Ferreira production Continental ramps up Ferreira production Continental ramps up Ferreira production Continental ramps up Ferreira production


Lou Caruana

The company expects further increases in production this month after problems in January with industrial action, flooding and derailments, chief executive Don Turvey said.

"It is pleasing to see that the tough decisions made at Ferreira in the last quarter are already beginning to have results,” he said.

“Our sales of export thermal coal through Richards Bay Coal Terminal have increased demonstrably and at a time of increasing coal prices, and also when heavy rains and derailments have materially impacted other export coal producers.

“The outlook for the balance of the quarter is positive and we anticipate that we will meet our targeted sales of 141,000 tonnes.”

ROM production from the Ferreira mine for the months of January and February was 28,450t and 41,233t respectively, while export coal sales were 40,448t and 48,532t.

The average realised net preliminary export thermal coal price received for sales during January and February was $US118/t.

Production in January was affected by the holiday periods and by heavy rains and industrial action in South Africa, which led to a loss of five production days.

ROM production in February was an increase of 14% on the average monthly ROM production in the December quarter and came despite a number of national strikes affecting operations. ROM production for the balance of the March quarter is forecast to be approximately 55,000t.

The establishment of the northern pit operations and improving operating performance at Ferreira has already resulted in a reduction in mining costs.

Greater utilisation of the processing plant and the ability to source raw export-quality coal from neighbouring mines, which themselves have no processing facilities and cannot wash the coal to achieve an export thermal coal product, allowed Continental to achieve improved efficiencies and returns, and further reinforced the strategic location and value of its Delta processing operations.

Total FOB costs of $US70-80/t can now be achieved by the company, Turvey said.

The Delta processing operations have operated continually throughout the quarter, unaffected by the heavy rains or national strikes, with total tonnes processed for January and February of 122,970t, comprising 101,406t from stockpiles and 21,564t of buy-in coal.

For the quarter to date, sales of 46,697t of a primary export thermal coal product and a further 20,568t of a secondary domestic thermal coal product have been achieved. A total export yield of 59% was achieved, representing a 20% improvement over the December quarter.

Continental’s second shipment of export coal from Richards Bay was made on March 7 for an amount of 32,996t. A similar scheduled shipment is due to be made in April.

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