Strategic Natural Resources delays first coal shipment amid teething problems

Strategic Natural Resources (SNR) announced Monday it has delayed the first shipment of coal from its Elitheni Mine in the Eastern Cape of South Africa.

The company said the wash plant at the mine, which started operation last month, has experienced some 'commissioning teething problems' preventing it from reaching predicted output rates.

The first cargo of SNR has been pushed back to late January/February 2013 to make sure the wash plant is operating at optimal capacity before exporting through East London.

SNR will satisfy its contractual commitment for a late December/early January cargo through coal trading.

Manufacturer, PJ Technologies, have experts on site and they are confident they can improve wash plant up to predicted output rates in January.

On a more positive note, initial coal seam thickness reported greater than expected by Minxcon in the recent resources and related resources update. It will assist in reaching forecast production rates.

Staff recruitment and training is also on track, along with additional mining equipment which will arrive in January to help increase mining capacity.

David Nel, Chief Executive Officer, said: "I am very pleased overall with the operational progress made at the Elitheni mine. Whilst the wash plant output rate is not yet at peak production, I am confident, based on the commitment of the manufacturer, PJ Technologies, that this will be fixed in January.

"I am optimistic, based on what has been achieved during 2012, that the coming year will be a successful one for the Company and its shareholders."

The AIM-listed company has a market capitalisation of £41.04m. Shares fell 0.35% to 201.80p at 9:13 Monday.

RD