Thungela Resources, listed on the Johannesburg Stock Exchange, plans to invest R3.9 billion in South Africa. This significant capital expenditure aims to enhance its coal operations in Mpumalanga. Over the next six months, the company will spend an estimated R1.3 billion, followed by an additional R800 million in the final half of its financial year ending June 2025.
Of the initial R1.3 billion, R800 million will go toward expanding the Elders and Zibulo North Shaft projects. The remaining R500 million is earmarked for sustaining stay-in-business capital expenditure. Thungela will spend the remaining R1.8 billion to complete life extension projects at Elders Colliery, near Bethal, and Zibulo Colliery, near Ogies. Both projects are on schedule and within budget.
“These investments secure the future of our South African operations,” said Thungela CFO Deon Smith in a stock exchange news service announcement covered by Mining Weekly.
Thungela is also transitioning its South African coal marketing activities from Anglo American Marketing, set for completion on July 1. The team at Thungela Marketing International in Dubai is marketing coal from the acquired Ensham mine in Australia.
In the first half of this year, South Africa’s Richards Bay benchmark coal price averaged $99.71 per tonne, 18% lower than last year. Additionally, the discount to the Richards Bay price has increased by 1% from last year’s 14%.
Export saleable production from Thungela’s South African operations for the first half of the year is expected to reach 6.2 million tonnes. This production rate aligns with the annual guidance range of up to 12.5 million tonnes. The free-on-board cost per export tonne, excluding royalties, is projected to be at the lower end of the R1,170 to R1,290 range.
Thungela expects on-mine inventory to increase by 1.1 million tonnes by the end of the year, assuming Transnet Freight Rail’s (TFR) performance remains at the expected 46 million tonnes on an annualized industry basis. The South African coal industry, including Thungela, continues to support TFR in procuring critical locomotive spares. TFR has made significant progress installing compressors and batteries.
“We expect to see improvements related to the installation of these spares and other initiatives from 2025,” Smith stated.
Thungela’s strategic investments and operational enhancements underscore its commitment to strengthening its presence in South Africa. By expanding its coal projects and optimizing its marketing activities, the company aims to secure long-term growth and stability. As the coal industry faces fluctuating prices and logistical challenges, Thungela’s proactive measures ensure its resilience and competitiveness in the market.
In addition to its operational focus, Thungela is also dedicated to supporting South Africa’s broader economic goals. By investing in infrastructure and collaborating with key stakeholders, the company contributes to the country’s energy security and economic development.
Thungela’s financial and operational strategies reflect its adaptability in a dynamic industry. The company’s commitment to innovation and efficiency positions it as a leader in the South African coal sector. As it navigates the challenges and opportunities of the market, Thungela remains focused on delivering value to its shareholders and stakeholders.
The company’s upcoming milestones, including the completion of the marketing transition and continued project developments, are critical to its future success. Thungela’s proactive approach to managing its operations and investments demonstrates its dedication to sustainable growth and operational excellence.
Thungela Resources is set to strengthen its market position and drive long-term growth with planned significant capital expenditure and ongoing strategic initiatives. The company’s investments in South Africa’s coal industry demonstrate its commitment to securing a sustainable and prosperous future.
Source: Mining Weekly
