South Africa’s Thungela Resources said on Monday it was seeking to buy more coal assets after raising its production outlook for the fossil fuel following its acquisition of an Australian mine last year.
Thungela, which ships thermal coal burned in power stations, bought the Ensham mine as part of a strategy to shift its sources away from home, where companies are struggling to export the fuel due to insufficient rail capacity.
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While it wants to extract maximum value from the new mine, Thungela, which was spun out of Anglo American in 2021, also wants to purchase more coal assets, CEO July Ndlovu said.
“We are looking for the right quality assets, assets that are fairly priced, that we can add value but we also have to be diligent in terms of what we look for,” Ndlovu told a media conference.
The Johannesburg-based miner said on Monday its net profit slumped 73% to 4.97 billion rand ($264.81 million) in the year ended December 2023 from about 18 billion rand the previous year due to lower coal prices and persistent rail constraints in South Africa.
It proposed a $27 million share buy back and declared a 10 rand per share final dividend. Thungela’s shares were up 5.11% at 1002 GMT, with the broader JSE All Share index down 0.18%.
The Ensham mine is forecast to ramp up output to about 4 million tons by 2026 from 2.9 million tons last year. This could help Thungela raise group output to about 15 million tons, even as some mines in South Africa gradually run out of commercially viable ore, Ndlovu said.
Thungela said output from South Africa is forecast to stay steady at around 11 million tons due to the expiry of some mines. The company shipped about 15 million tons of the fuel in 2021, but its South African output is not expected to rise again to those levels, Ndlovu said.
Source: Reuters
