Thungela Resources said Monday that coal production fell in the first half of 2023, although in line with full-year guidance, and that it expects to deliver positive earnings and cash generation despite a sharp fall in coal prices.
The South African miner said its export saleable coal production is expected to decline 5% to 5.8 million metric tons from 6.1 million tons in the same period in 2022. For the full year, Thungela has guided for export saleable production between 10.5 million and 12.5 million tons.
For the company to reach the upper end of it guidance, an industry run rate of 53 million tons a year in the second half-year is needed, it said.
By early May, the company’s performance was stabilized at around 48 million tons a year following a weak start to the year, Thungela said. The stability was interrupted by two derailments in May which resulted in the loss of around 300,000 tons in railed volumes.
The London-listed company said coal prices has dropped significantly to an average $135.47 a ton in the year to date compared with $270.87 a ton for full-year 2022.
Despite the derailments in May and the lower coal prices, the company expected to deliver positive earnings and cash generation in the period, it said.