Coal of Africa’s Mooiplats Destined for Care and Maintenance

Coal of Africa Ltd. (ASX:CZA,LSE:CZA) announced that after trying for two years to make its Mooiplats colliery profitable, it plans to place the facility on care and maintenance.

As quoted in the press release:

The Company’s efforts to improve productivity and establish profitable operations at Mooiplaats, including capital investment, have been hampered by the global downturn in thermal coal prices over the last year. The situation has been exacerbated by the inability of the Colliery to ramp up production to achieve required targets due to poor operational performance and challenging geological conditions. Consequently the Company has continued incurring an unacceptable level of operational losses.

Mooiplaats recorded a loss of approximately R167million for the financial year ended 30 June 2012 and has generated an average monthly loss of R20million since the beginning of the current financial year. The Company has an allocation of three million tonnes in Maputo at the Matola Terminal and is working to mitigate the take or pay exposure. The Company’s cash position as at 31 March 2013 was US$67.4million.

Click here to read the full Coal of Africa Ltd. (ASX:CZA,LSE:CZA) press release.