Coal of Africa makes losses after hit from falling prices

Coal of Africa said pressure on thermal coal markets was hitting profits, something that was likely to continue into 2013.

This meant the South African operator was suffering a funding shortfall, which added to investor concerns as they pushed shares down 7%.

The firm said pressure on index linked coal prices continued during the last quarter declining from $103/tonne in March to $87/tonne at the end of June.

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This led to the company's thermal coal mines reporting losses during the quarter.

The company added that export coal sales during the period of 411,005 tonnes was 9.3% lower than the previous quarter.

"The anticipated negative cash flow from our thermal mines combined with the litigation payment in the June quarter and increases in other capital expenditure means that the company is forecasting a funding shortfall of approximately $15.7m for the September 2013 quarter," said Chief Executive John Wallington.

"In addition to the Investec Financing Package, the Company is in continuing discussions with various parties with regards to providing further funding for the Group.