Thungela rues ‘missed opportunity’
Thungela Resources said yesterday it had seen increased demand for thermal coal from Europe as the war in Ukraine dents supply, but rail logistics constraints in South Africa continue to limit its capacity to export.
Higher coal prices and better cost management helped Thungela post its first full-year profit of R6.9 billion, following its demerger from Anglo American last year.
Thungela’s headline earnings per share – the main profit measure in South Africa – were R66.57 for the year ended 31 December, up from a loss per share of R5.31 the previous year.
“Through our marketing team in Anglo – as you know we sell all our coal to Anglo –we are aware of significant queries and interest from Europe, and we’ve been able to sell parcels into Europe,” said Thungela chief executive officer July Ndlovu.
“And that’s quite exciting for us because again it diversifies the countries that we serve.”
Ndlovu said Thungela had started getting enquiries from Europe even before the war in Ukraine, as European energy prices spiked amid gas shortages. Thermal coal prices have surged further on fears of disruption to Russia’s gas supplies.
However, Thungela said it was unable to take advantage of the growth in demand.
In 2021, Thungela exported 15 million tonnes, down 16% on the previous year due to logistics problems. The miner forecast exports of between 14 and 15 million tonnes for 2022, climbing to 16 million tonnes in 2023.
Transnet has been plagued by large-scale copper theft hobbling its freight operations and denting its finances.
“This is a big missed opportunity, not for Thungela only but clearly for the industry, and for South Africa as a country. Probably the largest missed opportunity in the last 12 months,” Thungela chief financial officer Deon Smith said.
Thungela said it had stockpiles of 2.8 million tonnes of thermal coal at the end of December, a million tonnes more than its optimal stockpile, and has had to throttle production at some of its high cost mines.
Thungela, which listed on the Johannesburg Stock Exchange in June 2021, declared its first dividend of R18 per share.