Thungela Resources, a thermal coal exporter led by South African executive July Ndlovu, has affirmed its commitment to pursuing new acquisitions despite encountering lower coal prices and logistical hurdles in transporting the fossil fuel to local ports, which have impacted the company’s profits.
“We are going to continue to look for assets, and we have always said we wanted to grow our business, diversification in a commodity that we know makes sense. If you are in commodities, cycles come and go, and the best commodity investors are those who invest throughout the cycles,” Ndlovu said.
He emphasized that the company’s geographical diversification plans remain unchanged, even in the face of coal prices experiencing a decline from their historic highs.
Thungela Resources has established itself as a market leader in the production and export of high-quality, economically viable thermal coal. The company operated as a subsidiary of Anglo-American until its demerger on June 6, 2021, resulting in an independent listing on both the Johannesburg and London stock exchanges.
Earlier this year, the renowned coal exporter, under Ndlovu, executed a strategic move to broaden its operational scope by announcing its intent to acquire a mining operation in Australia.
This strategic decision aims to bolster revenue and earnings for Thungela Resources. In collaboration with co-investors, the company is poised to secure an 85-percent controlling stake in the Ensham mine, owned by Idemitsu in Australia.
The ongoing challenges in coal transportation have impacted several industry players, including Thungela Resources, Exxaro Resources, and Kumba Iron Ore, all of whom are grappling with stockpiling coal and iron ore due to logistical constraints faced by state-owned rail operator Transnet in transporting these resources to the nation’s ports.
Thungela Resources, with approximately 2.7 million metric tonnes of coal valued at around R3 billion ($159 million) in stockpiles, announced a substantial 69 percent reduction in first-half profits on Monday.
The company’s projection for this year’s output stands between 11.5 million and 12.5 million metric tonnes, a scale down from its annual production capacity of roughly 16 million tonnes of coal. Despite the ongoing market challenges, Thungela Resources remains resolute in its pursuit of expansion, displaying a strategic vision under the leadership of Ndlovu.
