KINETIC DEV(01277): The Makhado project has officially started production.

KINETIC DEV (01277) announced that the group has completed the subscription of 51% new common shares of MC Mining on April 22, 2026, with a total subscription cost of USD 90 million. On June 11, 2026, the group subscribed to convertible bonds from MC Mining, amounting to a total principal of USD 6.136 million, which can be converted into newly issued shares of MC Mining along with interest on the maturity date. The above investments were funded by the groups own capital and part of the proceeds from the placement, primarily aimed at constructing and operating MC Minings flagship coking coal project located in Makhado, South Africa. The group will further develop the Greater Soutpansberg (GSP) project under MC Mining, with total resources of approximately 7.604 billion tons across both projects. The Makhado project officially commenced production on August 1, 2026. The project status and detailed progress are as follows: Resource Status: The Makhado project is located in the Soutpansberg coalfield of Limpopo Province, South Africa. It is an open-pit coal mine covering an area of 7,651.28 hectares, with a resource volume (in-situ total tonnage) of 706 million tons. Operational Start: The coal washing plant has achieved the required product quality indicators through preliminary commissioning, and the coal mine officially commenced production on August 1, 2026. Production Plan: Based on the existing design capacity of the Makhado project's coal washing plant, it is expected to produce 280,000 tons of coking coal and 230,000 tons of thermal coal in 2026. The annual capacity is projected to reach 880,000 tons of coking coal and 720,000 tons of thermal coal by 2027. Additionally, the Makhado project has plans for future capacity enhancement, and the group expects to further increase annual output 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 over 40 potential customers overseas, primarily located in Vietnam, Indonesia, Malaysia, India, South Africa, and surrounding countries, covering large steel companies, coking enterprises, cement companies, and international coal traders. The company has provided coal quality information to key clients and will gradually provide washed coal samples to conduct blending and coke oven tests based on project production progress. According to current customer feedback, the quality of the companys products meets the blending requirements of key target clients, and after testing is completed, procurement quantities will be confirmed, and business cooperation will be advanced. Based on the currently secured customer demand estimates, it is expected to cover most of the company's sales plan for the 2026 fiscal year, providing a good guarantee for product sales after the project commences production. Products and Coal Quality: The main product is low-sulfur, high-heat-strength coking coal, and the secondary product is 5,500 kcal low-sulfur premium thermal coal. Cost Control: In the future, the group is forming its own mining and transportation teams to further reduce costs through internal collaboration within the group. Future Outlook In terms of production, the Makhado project is expected to reach an anticipated scale of 4 million tons of raw coal by 2027, while also implementing further capacity enhancement plans simultaneously. In terms of sales, the coal products from the Makhado project will be sold to global markets, with key clients mainly including steel companies, coking enterprises, cement companies, power plants, and large international coal traders, covering regions such as Southeast Asia, Africa, the Middle East, India, and China. In the future, the company will continue to expand into international markets in Brazil, Europe, and the Middle East, continuously enriching its customer structure, further enhancing the competitiveness of its products in the international market and its sales scale. The official commencement of production at the Makhado project marks a new cycle of accelerated value release for the groups high-quality overseas production capacity. In the future, the group will create a high-capacity, high-efficiency, high-quality overseas coal production base by optimizing mining plans, improving washing efficiency, and strengthening full-process cost control, bringing considerable profit returns to the company and its shareholders.