Will Thungela and Exxaro remain the JSE’s cash cows?
Both companies could continue to be chunky dividend payers in the years ahead — unless acquisitions and buybacks become more important
It’s sometimes said that the biggest challenge for executives is not how they cope in the hard times, but how well they allocate cash when times are good. That may be a theme worth watching at the JSE’s two main coal companies, Thungela Resources and Exxaro Resources.
Both benefited from an unexpected increase in the coal price last year following the invasion of Ukraine. By mid-2022, thermal coal prices had glided through $400/t in Australia and $300/t in South Africa (see graph), well above the five-year averages. The UK dusted off a coal mine, its first new commissioning in 30 years, while global coal production reached a record high. ..
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