ASX- and JSE-listed MC Mining has reported solid development progress at its Makhado steelmaking hard coking coal project, in Limpopo, during the quarter ended December 31, 2025, while production challenges at its Uitkomst Colliery, in KwaZulu-Natal, persisted and the company’s available cash declined sharply.

In its activities report for the second quarter of the 2026 financial year, published on January 30, the company said development at the Makhado project continued to advance, with several key milestones achieved.

Hot commissioning activities for the coal handling and preparation plant are scheduled to begin by March, while mining of overburden material from the opencast pit remains on track to expose run-of-mine (RoM) coal for delivery to the plant during commissioning.

Steelworks, and mechanical and equipment installation at the coal plant are continuing, and significant progress has been made towards commissioning the 14 km overhead power transmission line servicing the project.

MC Mining reported one lost-time injury (LTI) for the quarter. The Makhado project reached 1 005 days without a LTI, representing more than 1.5-million man-hours worked, while Uitkomst Colliery recorded one LTI during the period.

In contrast to the progress at Makhado, operational performance at Uitkomst remained under pressure. The company said that, despite the implementation of an operational improvement plan, production gains were not achieved. While overhead cost reductions were realised, the lack of improvement in output prompted further reviews of Uitkomst’s operating strategy.

RoM coal production at Uitkomst declined to 57 606 t during the quarter, representing a 30% decrease compared with the previous quarter and a 40% decline compared with the same period in the prior year, when production totalled 95 489 t.

MC Mining said the year-on-year decrease was owing to delays in the start of the turnaround plan, temporary operational challenges related to geological intrusions, wetter mining conditions and reduced availability from the ageing equipment fleet.

Coal sales from Uitkomst also fell during the quarter. The colliery sold 40 229 t of high-grade coal, compared with 61 195 t in the corresponding period of the prior year, a decline of 34%. There were no sales of lower-grade middlings coal during the quarter, compared with 4 276 t sold in the first quarter of the 2026 financial year.

Despite lower production volumes, coal plant yields remained high at 79.7%, which the company attributed to operational improvement initiatives implemented over the period.

Elsewhere in the portfolio, MC Mining said comprehensive evaluations of geological and mine planning information were undertaken at the Vele Aluwani semi-soft coking coal and thermal coal colliery.

Work also continued to negotiate surface land access terms for priority coal deposits within the Greater Soutpansberg projects earmarked for development.

Market conditions remained challenging during the quarter. Average thermal coal prices declined to $86/t, compared with $91/t in the first quarter of the 2026 financial year and $110/t in the second quarter of the 2025 financial year.

Premium steelmaking hard coking coal prices also softened, averaging $199/t during the quarter, compared with $206/t in the corresponding period of the prior year.

From a financial perspective, MC Mining reported available cash and facilities of $2.9-million at the end of the quarter, down from $13.2-million at the end of the previous quarter.

During the period, Kinetic Development Group made payments totalling $7-million for the purchase of MC Mining shares under the share subscription agreement, with the payment relating to the sixth second closing under that agreement. The company also made a further repayment of R10-million towards its loan with the Industrial Development Corporation.

Meanwhile, on the board, MC Mining appointed Jianheng Deng as a nonexecutive director during the quarter, while Zhen He resigned from his position as a nonexecutive director.