(Reuters) - Forbes & Manhattan Coal Corp FMC.TO said it resolved a labor dispute at its South African mines but cut its full-year output forecast after it lost about two weeks of production.
The company, which also warned of a 63 percent fall in sales in the current quarter, said operations at its two mines will resume on November 19 after it agreed to an average wage increase of 14.8 percent.
Forbes Coal, like other miners in South Africa, has been facing wage-related labor disputes. While Anglo American Platinum AMSJ.J revised its production forecast, Kumba Iron Ore KIOJ.J warned of a 20 percent fall in profit due to the labor unrest.
Shares of Forbes Coal, which mines for bituminous and anthracite coal in the Klipriver coalfield in South Africa, rose 5 percent to 50 Canadian cents on the Toronto Stock Exchange on Friday. The stock has lost a third of its value since the strike began in mid-October.
“The overriding message is that they’ve resolved the labor dispute within a month of its starting, which is a positive,” said analyst Wojtek Nowak of Fraser Mackenzie.
Forbes Coal cut its production forecast by 24 percent to 1.3 million tonnes for the year ending February 28, 2013.
The Toronto, Ontario-based company warned of lower sales in the fourth quarter due to weak coal prices. Coal price .DJUSCL has fallen about 41 percent this year to $150.06 per tonne.
“Surely there is an impact for the sales this quarter and the next quarter but we do not expect this to impact next year’s results,” said Nowak.
Third-quarter production will be about 256,000 tonnes, down from its earlier forecast of 463,000 tonnes, the company said.
Forbes suspended operations in late-October following the death of a worker during the strike. (Reporting by Krithika Krishnamurthy in Bangalore; Editing by Sriraj Kalluvila)