Exxaro Resources, one of Eskom’s largest coal suppliers, is expecting the export price of coal to increase by almost 80% in the first half of the year. But poor rail performance has meant that exports declined, despite high international demand.
“Our domestic and export flows remain severely impacted by logistical constraints and it continues to impact our ability to move coal to customers and ports,” it said in an update to shareholders on Thursday.
Coal experts were down 27% in the first half of 2022 compared to the second half of 2021.
“Despite the current challenges, Exxaro is successfully pursuing alternative markets and logistic channels to realise value for our business.”
It now expects to export a total of 6.2 million tons of coal in 2022, against an initial export guidance of 7.6 million.
Exxaro said it expected the benchmark API 4 coal expert index to average $270 per ton for the six months ending 30 June, compared to $151 per ton in H2 2021.
“The Russia-Ukraine war and Europe’s quest for alternative suppliers of especially high-quality thermal coal continues to drive the shortages. Extremely high and volatile prices were recorded during 1H22.”
The miner said that while total coal production was expected to rise by around 1% in H122, sales would be down 3% due to logistical constraints and the sale of its Exxaro Coal Central operations last year.
The group will provide a detailed account of its business performance in the first half of the year when it publishes its interim results in mid-August.
Source: Fin 24
