Sadovaya marginally increases coal mining in July

The two mines of Sadovaya Group (SGR PW) produced 267 kt of coal in 7M12 (up 11% yoy), based on stats from the Ministry of Energy. Implied July output amounted to 38.7 kt of coal, up 1.2% mom.

Roman Topolyuk: July’s broadly flat mining output is of no surprise, as Sadovaya’s mining capacity has not increased. In its recent monthly update, the company planned to launch a new longwall at Rassvet-1 Mine in August – if this happens, it will increase Sadovaya’s mining by up to 6% this month. Taking into account the postponement in longwall commissioning, we expect the company will underperform its 532 kt mining plan for 2012 by 5%.