20 September 2023
Minergy, the junior coal miner exulted its first half of the year sales results that were buoyed by fears of energy crisis across western Europe in the wake of Russia- Ukraine war and the northern hemisphere winter period. Total revenue in its full year results released on Thursday to June 30, 2023 increased by 21% to P 512 million, and pure coal sales remained steady at P298 million like -on -like.
“The year under review has been indeed one of changing fortunes. During the first half of the year, Minergy operated, as reported, within unprecedented booming sales environment, which supported full production, with the Group achieving new sales and production records,” the company said on Thursday.
The colliery realised first operating profits and EBITDA thanks to the good market conditions during the first half, but, the bottom fell out in second half of the year, which it blamed it on sudden crash in the international coal prices and the unexpected cancellation of the contract by the contractor at the beginning of March 2023.
“Sales volumes dropped from monthly average of about 67,000 tonnes per month in the first half to about 40,000 tonnes per month in the second half,” the company said.
An analyst at Imara Capital , Mogorosi Badisang said Minergy’s woes are also compounded by its balance-sheet and over supply of coal in the market.
“The major problem is debt on their book and they have been trying to consolidate their balance-sheet,” he said.
However, Minergy Chief Executive Officer, Matthews Bagopi shrugged-off all concerns about the future of the mine on Friday when talking to Sunday Standard Online service.
“The focus of the business is to finalise the appointment of the mining contractor, resume production and re-establish market relations that have been affected by the stoppage in March this year,” he said.
“Even though people believe that global coal markets prices have crashed, with reference the unprecedented performance since 2022, coal as a bulk commodity is still doing well compared to its long term historic performance.
This long -term performance would be around USD85(per ton) on the API4 index — established by Argus, McCloskey and South African Coal Report compared to the USD 120-130 we are currently experiencing,” he said, adding “the USD 400 per tonnes that existed during the boom was just a windfall.”
The colliery is targeting supplying industrial , cement , steel and seaborne coal for exports. For seaborne its was using Walvis Bay and Maputo seaports . It is also envisaging to have a grip on the South African market that was disrupted by the contractor’s stoppage.
The miner is operating at the rich Masama coal fields within a an area of 671 kilometers squared. The area has coal reserves at the tune of 376 million tonnes– that is expected to last for 100 years– of which 80 million tonnes will be extracted using the opencast mining method.
With that it has an export capacity of 750,000 tonnes per month “under a blue-sky”.
Source: https://www.sundaystandard.info/minergys-profits-up-21/
