Thungela confident it will exceed full-year export saleable production guidance

Coal miner Thungela said on Tuesday it was confident it would exceed its full-year export saleable production guidance in SA and Australia.

However, free-on-board (FOB) cost per export tonne is expected to be below the guidance range, reflecting higher production and a continued focus on cost efficiencies.

The group expected export saleable production in Australia to be about 4.0-million tonnes (on a 100% basis), higher than the revised guidance range of 3.5-million to 3.8-million tonnes issued in August, mainly due to productivity efficiencies and better than expected progress made in traversing geological features, CFO Deon Smith said in a statement on Tuesday.

Export saleable production in SA is expected to be at about 13.4-million tonnes, higher than the guidance range of 11.5-million to 12.5-million tonnes, and about 9% higher year-on-year. This is in line with the improved mine productivity and rail performance in the second half of the year.

The various Transnet Freight Rail (TFR) initiatives, supported by the coal industry, have allowed for the annualised run rate to end-November to increase to about 52-million tonnes, or 56-million tonnes since the annual maintenance shutdown period that ended in July.

The TFR’s improving performance is due to the effect of the fitment of the critical locomotive spares, the introduction of additional locomotives on the North Corridor line and the line maintenance with enhancements to the signalling network.

The group said benchmark coal prices had softened in 2024 with the Richards Bay benchmark coal price averaging $105.21/tonne for the year to date, compared with $121/tonne a year ago. The Newcastle benchmark coal price has averaged $135.59/tonne for the year to date from $172.79/tonne for the 2023 financial year.

According to the World Energy Outlook 2024, published by the International Energy Agency in October, global demand for coal in 2024 is expected to be slightly higher than in 2023, as strong energy demand in China and India result in higher coal demand, that more than offsets the decline in the use of coal in Europe.

“While rail performance remains constrained in SA, it is encouraging to note the recent improved TFR performance and we expect further improvements in 2025,” Thungela said.

Notwithstanding the underlying operating environment with volatile market conditions and geopolitical headwinds, the group expects to report improved cash generation in the second half of the year.

It will release its full-year results on March 17.

mackenziej@arena.africa