EastCoal Inc. suspends Ukraine operations after 'disappointing' output

EastCoal Inc. shares tumbled after the company said it suspended tip washing operations in Ukraine after 'disappointing' levels of coal output.

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.

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

Recommended

Imperial Brands has an 8.3% yield – but what’s the catch?
Share tips

Imperial Brands has an 8.3% yield – but what’s the catch?

Tobacco company Imperial Brands boasts an impressive dividend yield, and the shares look cheap. But investors should beware, says Rupert Hargreaves. H…
20 May 2022
Investing in drugmakers: uncommon profits from curing rare diseases
Share tips

Investing in drugmakers: uncommon profits from curing rare diseases

Treatments for medical conditions with only a small number of sufferers can still be very attractive for pharmaceutical companies and investors becaus…
20 May 2022
Share tips of the week – 20 May
Share tips

Share tips of the week – 20 May

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
20 May 2022
Delivering profits: should you buy Royal Mail shares?
Share tips

Delivering profits: should you buy Royal Mail shares?

The volume of parcels delivered by Royal Mail soared during the pandemic, and so did its profits. But it has been coming under pressure lately. So, as…
19 May 2022

Most Popular

The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves looks at the FTSE 100’s top yielding stocks for income investors to consider.
18 May 2022
Imperial Brands has an 8.3% yield – but what’s the catch?
Share tips

Imperial Brands has an 8.3% yield – but what’s the catch?

Tobacco company Imperial Brands boasts an impressive dividend yield, and the shares look cheap. But investors should beware, says Rupert Hargreaves. H…
20 May 2022
Barry Norris: we’re already in the 1970s. Here’s how to invest
Investment strategy

Barry Norris: we’re already in the 1970s. Here’s how to invest

Merryn talks to Barry Norris of Argonaut capital about the parallels between now and the 1970s; the transition to “green” energy; and the one sector w…
19 May 2022