Company Overview - Mongolian Mining Corporation is the largest producer and exporter of high-quality coking coal in Mongolia, operating the Ukhaa Khudag and Baruun Naran mines in Umnugobi province[3]. - The company is registered in the Cayman Islands and has its main operational location in Mongolia[8]. Business Objectives and Governance - The company aims to operate a safe and profitable mining and mineral processing business while promoting the development of Mongolia through modern technology[5]. - MMC focuses on sustainable growth by utilizing modern and cost-effective technologies to produce high-quality products at the lowest cost[7]. - The company is committed to minimizing its operational impact on the environment and adheres to all regulatory environmental standards[7]. - MMC emphasizes the importance of corporate governance as a cornerstone of its management and operations, following best international practices[7]. - The company aims to establish mutually beneficial relationships with local communities and government officials through community development initiatives[7]. - MMC's mission includes maximizing value for shareholders and the communities in which it operates, aspiring to be a leading mining company in the region[6]. - The company is dedicated to enhancing long-term relationships with suppliers and contractors, as well as maintaining strong ties with customers[7]. Operational Performance - UHG coal mine produced 2.3 million tons of raw coal in the first half of 2020, with a stripping ratio of 7.1 cubic meters per ton[37]. - BN coal mine produced 0.1 million tons of raw coal during the same period, with a stripping ratio of 9.4 cubic meters per ton[37]. - The company exported 1.3 million tons of coal products to China in the first half of 2020, including 1.2 million tons of hard coking coal, 0.1 million tons of semi-soft coking coal, and 40 thousand tons of washed thermal coal[45]. - The company's total coal sales volume in the first half of 2020 was 1.5 million tons, a decrease of 40.1% year-on-year, with sales categorized as 1.2 million tons of hard coking coal, 0.2 million tons of semi-soft coking coal, and 0.1 million tons of thermal coal[48]. - The average truckload of coal through the GS-GM border crossing decreased by over 60% compared to the same period in 2018 and 2019 due to COVID-19 restrictions[43]. Financial Performance - Revenue for the six months ended June 30, 2020, was $157,529 thousand, a decrease of 51.7% compared to $325,581 thousand in 2019[116]. - Gross profit for the same period was $47,636 thousand, down 63.4% from $129,873 thousand in 2019[116]. - Operating profit decreased to $23,652 thousand, a decline of 66.7% from $70,915 thousand in the previous year[116]. - Net profit for the period was $2,674 thousand, a significant drop of 94.3% compared to $47,143 thousand in 2019[116]. - Basic and diluted earnings per share were $0.27, down from $4.57 in the same period last year[116]. - Total comprehensive income for the period was a loss of $2,836 thousand, compared to a gain of $44,844 thousand in 2019[117]. Cost Management - The company has implemented cost reduction measures in response to challenging market conditions, based on recent operational performance[34]. - The total cost of revenue, including idle costs, was $109.9 million for the six months ended June 30, 2020, compared to $195.7 million for the same period in 2019, reflecting a reduction of about 43.8%[52]. - The unit mining cost (excluding idle costs) decreased to $14.0 per ton of raw coal for the six months ended June 30, 2020, compared to $15.0 per ton in the same period of 2019, a reduction of approximately 6.7%[55]. - The processing cost for the six months ended June 30, 2020, was approximately $14.1 million, down from $25.0 million in the same period of 2019[57]. - Transportation costs for the six months ended June 30, 2020, were $22.6 million, significantly lower than $59.7 million in the same period of 2019[59]. COVID-19 Impact - The company adjusted its coal mining operations due to the evolving situation of COVID-19, leading to temporary suspensions of operations[37]. - The company has implemented measures to preserve cash and improve efficiency in response to the COVID-19 pandemic, including temporary adjustments to production levels[126]. - The reopening of the GS-GM border station on March 23, 2020, helped mitigate some negative impacts from the border closure, although sales volumes were significantly affected during the first half of 2020[50]. - The company will continue to monitor the impact of COVID-19 on its business and adjust its response measures as necessary[49]. Environmental and Social Responsibility - The company is committed to fulfilling all obligations related to safety, environmental protection, and social responsibility in its operations[49]. - The company has maintained a focus on sustainable management practices and corporate social responsibility, particularly in response to the challenges posed by COVID-19[87]. - No significant environmental incidents were recorded during the reporting period, with only one low-risk incident (oil spill) investigated and corrective measures taken[92]. - A total of 178 water quality monitoring tests were conducted on herder wells and boreholes to ensure ongoing monitoring[92]. Shareholder Information - MCS Mongolia LLC directly holds about 57.08% of the company's equity, with MCS Mining Group Limited owning approximately 43.51% of the shares[96]. - The company’s board members hold significant shares, with Odjargal Jambaljamts owning 46,164,754 shares, representing approximately 4.49%[96]. - The company did not recommend the distribution of dividends for the six months ended June 30, 2020, consistent with the previous year[85]. Future Outlook - The company plans to explore opportunities for strategic partnerships and joint ventures to diversify its business and identify potential investment targets in Mongolia[49]. - The company plans to continue exploration activities to further assess and potentially expand its coal resources in the future[23].
MONGOL MINING(00975) - 2020 - 中期财报