Thungela beats production targets despite global coal price slump

Key topics:Output surpasses guidance as South African operations and rail logistics improve.Global coal prices remain at multi-year lows, weighing on realised export prices.Strong cash generation, cost control and asset disposals support shareholder returns.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..BizNews Reporter.Thungela Resources expects to exceed export saleable production guidance for the 2025 financial year, delivering a rare operational bright spot in a year marked by sharply weaker global coal prices. The Johannesburg-listed exporter said output from its South African operations is set to reach 13.7 million tonnes (Mt) for the year to 31 December 2025—above the guided range of 12.8Mt to 13.6Mt and slightly ahead of 2024’s 13.6Mt.The improvement was driven by the successful ramp-up of the Annea Colliery (formerly Elders) and continued strength at Mafube. These gains offset weather-related disruptions at Khwezela, where heavy rainfall constrained first-half production. The company also benefited from an improvement in rail logistics, with Transnet Freight Rail achieving an annualised run-rate of 56.6Mt to end-November—9% higher than in 2024. Export equity sales from South Africa are expected to rise to around 13.6Mt, up from 12.6Mt last year.Market weakness hits pricingDespite beating operational targets, Thungela remains under pressure from a global coal market that has experienced sustained price compression. Benchmark seaborne indices fell to multi-year lows during 2025, with the Newcastle benchmark touching USD90/tonne in September. Prices were weighed down by trade uncertainty, lower international gas prices and muted buying from China and India—both of which relied more heavily on domestic supply and alternative energy sources.For the year to 30 November, the Richards Bay Benchmark averaged USD89.63/tonne (down from USD105.30/tonne in 2024), while Newcastle averaged USD105.11/tonne (from USD134.85/tonne). Thungela realised an average export price of USD75.89/tonne via the Richards Bay Coal Terminal, reflecting a wider 15% discount to the benchmark. Still, the company noted early signs of market stabilisation, with modest restocking activity and forward price curves in contango through 2026 and 2027.Australian operations steady but challengedAt Ensham in Australia, Thungela expects export saleable production of 3.8Mt, within guidance but impacted by tougher geology early in the year. These geological issues affected coal quality and increased stockpiles of lower-grade product. However, the marketing team secured off-take agreements for these volumes, supporting overall sales performance.Cost control and portfolio reshapingThe group’s cost discipline remains a highlight. Thungela expects its South African FOB cost per export tonne—both including and excluding royalties—to come in below guidance. This reflects strong production, improved operational efficiencies and a favourable non-cash rehabilitation adjustment.Alongside operational progress, Thungela continues reshaping its South African portfolio, closing mines at the end of their economic life and disposing of assets where remaining resources would not deliver sufficient value. Recent deals include the sale of Goedehoop North and an agreement to transfer the Kleinkopje mining right at Khwezela—transactions that also pass related rehabilitation liabilities to buyers.Expansionary capex reached R1.2 billion, at the top end of guidance, mainly funding the Elders and Zibulo North Shaft projects.Strong cash position and shareholder returnsSupported by disciplined spending and steady output, Thungela expects to close the year with a net cash balance of R4.9bn to R5.2bn. The group returned R2.1bn to shareholders in 2025 through dividends and buybacks and reaffirmed its policy of distributing at least 30% of adjusted operating free cash flow.

Thungela beats production targets despite global coal price slump

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