Significantly reduced coal prices and difficult operational conditions have resulted in the board of SACMH resolving to cease operations of the company with immediate effect for a period of three months and to place the operations on care and maintenance. During this period, the board will review the operations, including the capital requirements and cost structure, with a view to deciding on the future direction of the business. Shareholders will be kept informed of developments and should accordingly exercise caution when trading in the company's securities until a further announcement is made. Mirkwood
some naive thoughts: amazing that almost everything world wide arrived at the same detrimental situation almost simultaneously - bankruptcy and depression. Can it actually be that the U S of A housing loan situation was the ONLY important event to bring the world's house of cards down?
This is probably more a case of weak operational management, poor strategy and pathetic execution...opportunistically raised R100m a couple of months ago on what basis? So, the coal price tanks from giddy levels and the operation is shut down? What about the Eskom contracts? No sensitivity analysis at different prices etc.? Wait for the dirt to be revealed...in time. At least the Royal Ba*****eng have enough dough to lose some more?
I'm somewhat surprised at this radical action by SACMH.I understood their coal contracts with ESKOM had favourable long term pricing locked in -- apparently not.Barry you're the coal Guru,how will this impact on the likes of CZA,WSL and others? Just how bad is the coal price at present ?
As Topgun pointed out,poor management and planning,as Simon rightly pointed out the price is off its lows....A good operation with the right backing should thrive....with winter approaching,good contracts and a tight reign on costs most well run coal companies should comfortably carry on.
South African Coal Mining Holdings (SACMH) had embarked on a cost-reduction exercise, the coal mining company said on Thursday. It was also exploring the recapitalisation of the business and finding a technology partner to assist with cost reductions. This comes after it said last month that following reduced coal prices and difficult operating conditions, the board would review group operations and capital requirements. This was with a view to determining the firm's direction. - Mzwandile Jacks