MINERGY REMAINS IN THE RED
Botswana Stock Exchange (BSE) listed Minergy, the owners of Masama Coal Mine has warned of impending losses incurred in the past financial year.
According to the company, the drop for the year ended 30 June 2023 will be beyond the P168 million recorded in the previous year.
“The board of Minergy advises
shareholders that the net loss before tax for the full year will be between zero percent and ten percent higher than the previous year,” said the company in a cautionary statement.
Despite the company’s potential, Minergy’s opportunity to operate at full capacity was lost by the sudden drop in export pricing from late December 2022.
“Exports through Walvis Bay became uneconomical, based on Free-on-Board (FOB) pricing and logistics costs to port. Minergy had to find replacement sales for 35 percent of sales in a market that was and remains flooded with coal, with local pricing coming under pressure in a buyers’ market.”
Perennial operation challenges that the mining industry faces continue to stifle Minergy’s activities.
“Mining costs have increased on the back of higher explosives and diesel prices. Operating expenditures have been affected by foreign exchange losses and a claim on an export vessel,” further said Minergy’s statement.
Though the company recently concluded a P90 million in funding from its main funder, the Minerals Development Company of Botswana (MDCB), the funds were allocated to the trade payable arrears of the mining contractor.
Meanwhile, Minergy now has to navigate an oversupplied and low priced market, exacerbated by new competition in the market.