should the ferreira coal mine be closed?

It would appear that from the latest results Ferreira is barely profitable if all all.

Revenue of ZAR31.1m was down 15% compared to the average monthly revenue of ZAR36.3m reported in the March 2012 quarter.

EBITDA of ZAR1.2m was down 50% compared to the average monthly EBITDA ZAR2.4m reported in the March 2012 quarter.

EBITDA is an accounting acronym for Earnings Before Interest, Taxes, Depreciation and Amortization. This means that all interest payments, taxes, depreciation and amortization entries in the income statement are reversed out from the bottom-line net income.

EBITDA for the mine was ZAR1.2m which is approx A$146,000.
It would not be unrealistic to expect that the interest, taxes, depreciation and ammortization amounts attributed to Ferreira would in total far exceed this EBITDA figure.

If the current quarter continues to reflect these figures, as a result of margins being squeezed one has to beg the question at what stage will the operations at Ferreria be closed and kept maintained until thermal coal prices reverse.