Ivanhoe’s Kipushi zinc mine in the DRC officially reopens
The restart marked exactly a century since the mine first went into production.
South Africa’s Thungela Resources is still searching for new mines to buy and may consider acquiring coking coal assets if it finds a good fit, CEO July Ndlovu said on Monday.
The thermal coal producer bought Ensham mine in Australia last year to diversify from South Africa where shipments are hobbled by lack of sufficient rail capacity – although Ndlovu said that situation was set to improve.
The performance and returns from the Australian mine so far justify Thungela’s strategy of growing through acquisitions, Ndlovu told Reuters in an interview.
“We’re always looking for opportunities and coal in general, including coking coal, is of interest to us,” Ndlovu said.
At the Ensham operation, Thungela is weighing plans to invest in new coal production, because of “additional potential given the size of the resource”.
While most banks and financiers are now shunning funding new coal production, Ndlovu said Thungela, which was spun out of Anglo American in 2021, was able to fund its own development projects.
“If we do identify attractive opportunities, and we believe that they are more value accretive and enhance shareholder returns, we should be able to fund those,” Ndlovu said.
In South Africa, Thungela expects coal exports to rebound from next year as rail bottlenecks ease.
The country’s coal shipments fell to a three-decade low of about 47 million tons per year in 2023 as state-owned ports and rail company Transnet’s capacity was limited by lack of locomotives and spares, as well as cable theft and vandalism of infrastructure.
Coal shipments could rise to more than 50 million tons per year from 2025, Ndlovu said. Transnet’s rail unit moved about 76.47 million tons of the fossil fuel in 2017.
“The worst is probably behind us,” Ndlovu said on a media call. “The building blocks are in place, therefore it stands to reason that there will be improvement.”
South Africa’s rail crisis has curbed coal shipments for companies including Thungela, Exxaro Resources and Glencore, forcing some miners to truck the fossil fuel by road and to use alternative ports in neighboring Mozambique.
The lack of rail capacity has also hit earnings for producers at a time when prices for the fuel have softened. Thungela said its profit in the six months through June plunged 61% to 1.2 billion rand ($67.3 million).
($1 = 17.8195 rand)
(By Nelson Banya and Felix Njini; Editing by Conor Humphries)
Comments