FOR IMMEDIATE RELEASE
19 MAY 2010
BISICHI MINING PLC
INTERIM MANAGEMENT STATEMENT
Bisichi Mining PLC (‘Bisichi’), the UK mining company with direct coal mining
operations in South Africa, is pleased to provide the following update about
its operations:
The challenging environment experienced in the second half of 2009 by Black
Wattle Colliery (‘Black Wattle’), our direct coal mining operation in South
Africa, has continued into the first half of 2010.
This is principally due to the following reasons:
* The Rand continues to be strong against the US Dollar.
* Coal prices in all of the group markets continue to remain low.
* A late wet season has reduced opencast production
Although this challenging environment will affect profitability in the first
half of 2010, we remain extremely positive about the remainder of the year for
Black Wattle Colliery. As stated in the Annual Report, the Bisichi Management
has taken several steps to address this challenging environment that are
focused on increasing production including:
* Increasing the capacity of the washing plant from 130,000 to 170,000 metric
tonnes per month;
* Expanding the rail siding by installing a third rail line;
* Increasing our own opencast production; and
* Buying-in high quality coal from nearby reserves.
Although the implementation of some of these steps has been delayed by a late
wet season in the first half of 2010, the benefits of this increased production
are expected to come through as planned in the second half of 2010.
Overall production to date for the first four months of the year has averaged
120,000 metric tonnes per month compared to 90,000 metric tonnes in the second
half of 2009, but there has been a reduction in the comparable profitability.
This situation has arisen because the lower cost opencast production has been
impacted adversely by the heavy rain mentioned above and production has been
replaced by higher cost buy-in coal. An average overall monthly production of
160,000 metric tonnes is expected in the second half of 2010 as our own
opencast production increases.
In terms of markets, the physical demand for Black Wattle product remains
strong both domestically and internationally. To date Black Wattle has not been
materially affected by the current rail strike action in South Africa, but an
extended continuation of this strike may impact revenue.
Finally, income from Bisichi’s UK properties remains steady, with no
significant change from the second half of 2009.
Mr Andrew Heller, Managing Director of Bisichi said: “With all of Black
Wattle’s remaining opencast permissions being granted in February 2010, Black
Wattle is now in a strong position to fully utilise the increased capacity of
its expanded washing plant and rail siding, the benefits of which will be seen
in the second half of 2010.”
For further information, please call:
Andrew Heller, Bisichi Mining PLC 020 7415 5030
END
