Diversified miner Exxaro, which supplies coal to Eskom, said on Thursday declining global coal prices were more than offset by its investments in an iron ore venture, with profit jumping 42% during its year to end-December.
A “supply wave” of liquefied natural gas resulted in a 30% decline in average selling prices for Exxaro’s thermal coal during 2019, but the higher iron ore prices helped offset the drop.
Iron ore prices had jumped in 2019, partially due to supply problems in Australia and Brazil. Western Australia was struck by a cyclone in March, while a dam in Brazil controlled by miner Vale had collapsed in January.
Exxaro operates five coal mines across SA, but also has hefty stakes in a number of noncoal-related mining enterprises.
This includes a 21% stake in the Sishen Iron Ore Company (SIOC), a 26% stake in US-listed titanium producer Tronox, and a 26% stake in zinc producer Black Mountain, a subsidiary of Vedanta.
Core equity-accounted income from associates rose 45% to R4.75bn, mostly as a result of contributions from SIOC, Exxaro said.
Group profit for the year rose 42.5% to R10bn.