MONGOLIAN MINING CORPORATION PRODUCED 4.2 MILLION TONS OF COAL IN FIRST HALF OF 2017
The Mongolian Mining Corporation (MMC) reported that it produced 4.2 million tons of run-of-mine coal, recording a net income attributable to shareholders of 311 million USD in the first seven months of 2017. This is a 360 percent increase in the production of coal compared to 0.9 million tons of coal produced in the first seven months of 2016.
During the first half of 2017, MMC processed a total of 3.9 million tons of run-of-mine coal and produced two million tons of washed hard coking coal, the company’s primary product, representing an increase of 284.2 percent and 289.9 percent yearon-year, respectively.
MMC also reported that its total sales volume increased by 292.7 percent from 0.6 million tons of coal produced in the first seven months of 2016 compared to the 2.3 million tons of coal products in the first seven months of 2017. As a result, the total revenue of MMC for the first half of 2017 jumped to 245.9 million USD, representing an increase of 691.7 percent compared to the same period last year.
The company’s gross profit for the six months ended June 30, 2017 reached 110.6 million USD, compared to the gross loss of 33.6 million USD for the six months ended June 30, 2016.
The profit attributable to the equity shareholders of the company in the first half of 2017 was 311.7 million USD, compared to 61.7 million USD of loss attributable to the equity shareholders of the company in the same period in 2016. Net income attributable to shareholders is the net income minus the non-controlling interests, sometimes called minority interests.
The positive net profit was primarily attributable to improved coking coal market conditions resulting in the increased sales volume and average selling price, and the successful implementation and completion of debt restructuring. The total gain from the debt restructuring recognized by MMC was 263 million USD.
“Such profit is primarily attributable to improved coking coal market conditions increasing coal product tonnage sold and average selling price achieved. The successful implementation and completion of the debt restructuring have resulted in an extraordinary gain,” the company added.
In 2016, MMC reported that a major contributing factor for their net loss position was the decrease of the average selling price and sales volume of coking coal products due to prolonged tough market conditions in China, as coking coal price continued to be negatively impacted by global supply and demand imbalances in 2016.
More stringent environmental and safety regulatory limitations imposed on the domestic producers in China, major logistics disruption for Australian coking coal supply caused by cyclone Debbie in the second quarter of 2017, and also sanctions imposed by the United Nations on North Korea, which virtually stopped coal imports from the country to China, have also been beneficial for MMC.