Power Development (01277): The Makhado project has been officially put into production
Zhitong Finance App News, Power Development (01277) announced that the Group completed the subscription for 51% of MC Mining's new common stock on April 22, 2026, with a total subscription cost of US$90 million. On June 11, 2026, the Group subscribed for MC Mining's convertible stock notes with a total principal amount of US$6.136,000, which can be converted into shares newly issued by MC Mining to the company along with interest on the maturity date. The above investments were all raised from the Group's own capital and part of the placement proceeds. After investment, they were mainly used to build and operate MC Mining's flagship coking coal project in Makhado in South Africa. The subsequent group will further develop the Greater Soutpansberg (GSP) project under MC Mining. The total resource volume of the two projects is about 7.604 billion tons. The Makhado project was officially put into production on August 1, 2026. The project status and detailed progress are as follows:
Resource situation: The Makhado project is located at the Soutpansberg coalfield in Limpopo Province, South Africa. It is an open pit coal mine with an area of 7651.28 hectares and a resource volume (total tonnage in situ) of 706 million tons.
Operation started: The coal preparation plant has passed early commissioning and has now met the product quality requirements. The coal mine was officially put into production on August 1, 2026.
Production plan: Based on the design capacity of the existing coal preparation plant in the Makhado project, it is expected to produce 280,000 tons of coking coal and 230,000 tons of thermal coal within 2026; the annual production capacity will reach 880,000 tons of coking coal and 720,000 tons of thermal coal in 2027. In addition, the Makhado project is planning a future production capacity increase plan during the same period, and the Group expects to further increase annual production capacity to 2.2 million tons of coking coal and 1.8 million tons of thermal coal within the next two years.
Sales plan: As of the date of this announcement, the Group has developed more than 40 potential overseas customers. Key customers are mainly distributed in Vietnam, Indonesia, Malaysia, India, South Africa and neighboring countries, covering large steel companies, coking companies, cement companies and international coal traders. The company has provided coal quality data to key customers, and will successively provide refined coal samples to carry out coal blending and coke oven tests according to the project's commissioning schedule. According to current customer feedback, the coal quality of the company's products meets the coal distribution needs of the main target customers. After testing and verification is completed, the purchase quantity will be further implemented and business cooperation will be promoted. According to estimates of currently targeted customer demand, it is expected to cover most of the company's 2026 product sales plans, providing a good guarantee for product sales after the project is put into operation.
Product and coal quality: The main product is low-sulphur high-heat-strength coking coal, and the secondary product is 5,500 kcal low-sulphur high-quality thermal coal.
Cost control: In the future, the Group is setting up its own mining and transportation team to further reduce costs through collaboration within the group.
Future prospects
In terms of production, the Makhado project is expected to reach the expected 4 million tons of raw coal selected in 2027, and further capacity improvement plans will be implemented simultaneously.
In terms of sales, coal products from the Makhado project will be sold to the global market. Currently, key customers mainly include steel companies, coking companies, cement companies, power plants, and large international coal traders. Customers cover Southeast Asia, Africa, the Middle East, India and China. In the future, the company will continue to expand international markets such as Brazil, Europe, and the Middle East, continuously enrich the customer structure, and further enhance the competitiveness and sales scale of products in the international market.
The official commissioning of the Makhado project marks the Group's overseas high-quality production capacity entering a new cycle of accelerated value release. In the future, the Group will build an overseas coal production base with high production capacity, high efficiency and high quality by optimizing mining plans, improving washing efficiency, and strengthening cost control throughout the process, bringing considerable profit returns to the company and its shareholders.