Image: Gallo

Optimum Coal CEO Mike Teke

During the first six months of FY2012 the company produced 5,921 million tons of saleable coal, and revenue grew 13% to R3.04 billion.

EBITDA generated was up 11% to R641 million which included a record R382 million contribution from Koornfontein. Operating cash generated was up 62% to R716 million.

The group noted that group run-of mine coal production down 15% to 7,441 million tons and saleable coal production down 16% to 5,921 million tons including export coal production down 20% to 2,903 million tons.

CEO Mike Teke commented that the overall results for the period have been somewhat disappointing on the back of production challenges at Optimum Collieries which adversely affected attributable ROM tonnage performance, export sales volumes and consequent earnings.

"Optimum Collieries experienced three separate industrial action events during the period which materially affected production and tonnage cost performance. Additionally, two large draglines were relocated to the Kwagga North section impacting on available digging capacity in our opencast sections," he said.

He added that Kwagga North now has three large draglines in operation and coal is being transported across the newly constructed overland conveyor which has been successfully commissioned.

Koornfontein Mines achieved a record EBITDA contribution of R382 million during the period and continues to produce at targeted production rates. The TNC acquisition is expected to be concluded shortly. It will ensure that Koornfontein Mines returns to being a long life, high quality export coal operation.

Turning to safety, Teke said the group's safety performance continues to improve and it remains well ahead of comparable coal industry safety rates.

"TFR's general railings performance to RBCT during the period improved substantially when compared to prior periods. This is extremely encouraging from a coal export and project development perspective. Eskom coal demand requirements remain an important and compelling opportunity for local coal suppliers like ourselves," he said.

The group declared a special dividend of 30 cents per share subsequent to the end June 2011 financial year, which was paid to shareholders in October 2011. No further dividend was declared in respect of the current reporting period.