THUNGELA Resources, the South African thermal coal producer that was spun off from global Anglo American, said yesterday that following an initial recovery in the performance of Transnet Freight Rail (TFR) subsequent to the annual maintenance shutdown in July 2021, rail performance had continued to deteriorate in the second half of this year, which had reduced its export saleable production guidance.
Thungela said it consequently implemented actions to mitigate the impact on its business. In particular, the third-party sales, which used the rail entitlement of Thungela, had been reduced from 926kt in the first half of 2021 to an anticipated 25kt in the second half.
The group said it had also optimised its export equity sales mix, prioritising the railing of higher margin products, at lower volumes, recognising continued rail constraints. The coal industry had also assisted TFR to implement improved security measures, which were expected to contribute to an improvement in rail performance, following several instances of cable theft and related rail interruptions.
“Notwithstanding the actions already taken by Thungela and TFR, given the current and expected rail performance levels, some of our operations may become constrained as a result of reaching stockpile capacities from November 2021. Thungela continues to monitor rail performance and its potential impact on our operations, and to explore further actions that could be required to mitigate such impacts,” it said.
Full year 2021 export saleable production guidance was accordingly moderated to 14.8 million tons (Mt) to 15.2M from 15Mt – 16Mt as previously guided.
It said unless there was an improvement in rail performance, Thungela was expected to build additional export inventory stock levels of approximately 1.3Mt during the second half of the year.
BUSINESS REPORT