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Thungela Resources Limited, a top thermal coal exporter led by CEO, South African executive July Ndlovu, has made a strategic move to diversify its operations by acquiring a mine in Australia with the goal of increasing revenue and earnings.
With the aim of elevating its financial performance, Thungela Resources, in partnership with its co-investors, will be acquiring a majority stake of 85 percent in the Ensham mine from Idemitsu Australia.
The strategic acquisition is projected to cost an estimated AUD340 million ($240 million) and is considered a critical stride toward maximizing profitability and generating increased revenue for Thungela Resource and its strategic allies.
“We are pleased to be entering Australia, a leading mining geography with a successful track record of thermal and metallurgical coal production and reliable, well-established port and rail facilities,” Ndlovu said.
With its established success and exceptional port and rail infrastructure, Ndlovu expressed confidence that Australia would serve as the optimal platform for Thungela Resources to flourish and achieve greater success.
Upon completion, the transaction will bring an end to the leading thermal coal exporter’s pursuit of new assets, as it has been exploring opportunities beyond South Africa, where shipments have been limited by rail constraints.
The transaction will be carried out through Sungela Holdings, in which Thungela Resources will hold a 75-percent stake. Ndlovu, who owns a minuscule yet lucrative 0.74-percent stake in Thungela Resources, valued at more than $13 million, will play a crucial role in the deal.
The South African coal miner will provide AUD67 million ($46.2 million) in loans to its co-investors, Audley Energy and Mayfair Corporations Group, to purchase the remaining 25 percent of Sungela. This will result in Thungela owning an initial 63.75-percent stake in Ensham.
Thungela Resources is a market leader in the production and export of high-quality, low-cost thermal coal. It operated as a branch of Anglo-American until June 6, 2021, when it demerged from the behemoth, resulting in a separate listing on the Johannesburg and London stock exchanges.
