EastCoal Inc. shares tumbled after the company said it suspended tip washing operations in Ukraine after 'disappointing' levels of coal output.
The AIM listed group's production has been halted while engineering improvements are made during the commissioning phase.
Shares fell 6.38% to 11.00p at 1:37 following Friday's announcement.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The plant is expected to be back running in late February and should see improved monthly throughput within a few weeks.
Recent production at the Menzhinsky mine in Ukraine has failed to meet management's expectations due to the deterioration at the end of the current long wall.
"As a consequence some production must be rewashed before delivery to the company's main customer," the company said in a statement.
"This delay, in conjunction with falling coal prices, has produced disappointing results at the mine in recent weeks."
The company has recruited an US mining operations executive to assist in the day to day management of all mining operations in the Ukraine.
The Verticalnaya mine, on the other hand, has made good progress and development remains on schedule.
Directors are focusing on improved and expanded operations at the Menzhinsky mine for generating cash flow in line with the company's financial plan.
"Production delays have the potential to defer or restrict the investment in capital plant necessary for the company to fulfil its stated mining plans," the company added.
"Directors are therefore prudently investigating various sources of external capital to reduce the company's financial dependence on their short-term operating performance."
RD
-
British Airways revamps Avios scheme bringing down flight prices to £1With the new Avios part-payments scheme you can now bag a British Airways flight for as little as £1
-
RBS to close a fifth of branchesRoyal Bank of Scotland plans to shut 18 branches across Scotland, resulting in the loss of 105 jobs. We have the full list of closures.
