As it looks for fresh resources, Thungela raises its objective for coal extraction

After acquiring an Australian mine last year, South Africa’s Thungela Resources announced on Monday that it was looking to acquire other coal properties. This move comes after the company raised its production projection for fossil fuels.

The Ensham mine was purchased by Thungela, a company that transports thermal coal used in power plants, as part of an effort to diversify its suppliers away from the United States, where businesses are finding it difficult to export the fuel owing to a lack of rail capacity.

CEO July Ndlovu said that Thungela, which separated from Anglo American in 2021, aims to acquire more coal properties in addition to maximising value from the new project.
“We are looking for the right quality assets—assets that are fairly priced and that we can add value to—but we also have to be diligent in terms of what we look for,” Ndlovu said during a press conference.
The Johannesburg-based miner said on Monday that weaker coal prices and ongoing rail restrictions in South Africa caused its net profit to drop 73% to 4.97 billion rand ($264.81 million) in the year ending December 2023 from about 18 billion rand the previous year.
It announced a final dividend of 10 rand per share and suggested a $27 million share buyback. At 1002 GMT, Thungela’s shares were up 5.11%, while the JSE All Share index as a whole was down 0.18%.
It is anticipated that the Ensham mine will increase its production from 2.9 million metric tonnes last year to around 4 million metric tonnes by 2026. Even while certain South African mines are progressively running out of economically viable ore, this might enable Thungela to increase group production to roughly 15 million metric tonnes, according to Ndlovu.
Thungela said that while several mines are nearing their expiration, South Africa’s production is expected to remain stable at around 11 million metric tonnes. According to Ndlovu, the corporation transported around 15 million metric tonnes of petroleum in 2021, but it does not anticipate reaching similar heights again in South Africa.