Minergy Limited, owners of the Masama Coal Mine in Medie, have seen their financial troubles deepen in 2024, with losses expanding to P188 million, up from P138 million in 2023.
These challenges are primarily the result of production setbacks and high finance costs.
The company had to halt production in 2023 after parting ways with a key contractor, causing significant disruption to operations and revenue.
Revenue for the year plunged by 81%, falling to P97.2 million from the P512.5 million recorded the previous year.
This sharp decline was driven by the operational delays and the prolonged search for a new contractor, which led to minimal coal sales during the transition period.
The loss of major customers and delays in resuming production further worsened the situation.
Despite the company’s first coal sales in April 2024, steady production anticipated by June was not realized, as market uptake remained slower than expected.
However, with the transition to a new contractor, Meropa Resources, now complete, full production capacity is expected to be achieved by November 2024, aligned with improving market conditions.
Minergy has slowly re-entered the market, particularly focusing on the cement manufacturing sector, its primary consumer of duff coal.
Although the re-entry has been gradual, the company has made progress in attracting new customers and recovering its lost market share.
“Operational disruptions have pushed us to implement a new strategic and operational drive towards business improvement. Our strategic turnaround plan is showing early signs of success, helping stabilize operations and positioning Minergy for recovery,” said Matthews Bagopi, the acting CEO of Minergy Coal.
While global coal prices have risen to USD117/ton in August 2024, well above the long-term average of USD85/ton, these gains have provided some relief.
Minergy now aims to take advantage of these favorable conditions in both the inland and offshore markets.
“With global coal prices on the rise, the future looks promising, and Minergy is well-positioned to seize upcoming market opportunities.” Bagopi added
