MCM eyes rebound after tough 2025
Mbongeni Mguni | Monday July 20, 2026 06:00
The company’s Annual Report released recently, indicates that MCM recorded pretax losses of P216 million in the financial year ended December 31, compared to pretax losses of P26 million in 2024.
Much of the decline was due to reduced offtake by the Botswana Power Corporation (BPC) which accounts for more than 50% of revenue, as well as higher expenses associated with the termination costs of an agreement with the opencast mining contractor. General and administrative expenses increased to P368.6million from P182.4 million, due mainly to the termination costs.
The colliery, wholly owned by the state’s Minerals Development Company Botswana, suspended operations at its new Motheo opencast mining in December 2024 citing “significant challenges due to ongoing volatility in both international and regional coal markets”.
In the year ended December 2025, that decision, together with other technical challenges including the unavailability of critical spares, resulted in production dropping by 15%.
“The primary constraint was low availability and reliability of frontline equipment, particularly continuous miners, driven largely by inadequate availability of critical spares,” officials said in commentary accompanying the report. “Severe cash flow constraints further delayed delivery of spares and essential mining consumables, resulting in safety-led production stoppages. “Two mining sections also experienced difficult geological conditions that reduced advance rates.”
Overall revenues were down to P1.17 billion from P1.25 billion, whilst physical coal sales in 2025 reached 2.27 million tonnes against a target of 2.85 million tonnes.
“Coal sales were affected by heavy rainfall and flooding during the first quarter, resulting in extended truck turnaround times; low reliability of BPC power stations impacting thermal coal offtake; Botash tonnage shortfalls due to locomotive shortages and rail washaways; and cash flow constraints that limited equipment availability,” officials said.
Offtake by the BPC’s Morupule A and B power stations, which are situated next to MCM and are supplied under a 22-year contract, was down 20 percent against target. However, much the deficit was due to the colliery’s failure to supply product as required, with the monthly targets missed throughout 2025, except for the month of October.
MCM officials said part of the challenges included numerous instances of wet coal.
“MCM is currently focused on eliminating root causes. “Morupule B has also been constrained in terms of offtake due to reduced stockpiling capacity as a result of the coal shed project, thus requiring for MCM to continuously feed to bunkers. “This itself is a major capacity constraint especially when not all units are operational which has been the case for the whole year,” colliery officials said.
Looking ahead, MCM is prioritising boosting the availability of spares and consumables, completing overdue maintenance and executing the opencast restart to recover production and control unit costs in 2026.
“The opencast resumption represents a material opportunity to restore volumes and operational flexibility,” officials said.
MCM CEO, Edwin Elias, said key preparatory milestones for Motheo’s resumption had been achieved.
Resumption of opencast operations would mark a significant new chapter in MCM’s volume recovery and operational flexibility, he said.
The petering out of the termination costs associated with the former opencast mining contractor are also expected to help MCM’s books.
The coal producer has battled to steady its operations in recent years, following a steep drop in prices of the mineral since their peak in 2022. Unlike MCM which has a stable supply contract with the BPC, the country’s other producer, Minergy, has had to suspend operations at its Masama Mine as prices have declined in South Africa which remains the major market for coal.
MCM executives said going forward, the company would strengthen its efforts to reduce its concentration on the BPC.