Demand exceeds output at Minergy as coal shines again
Pauline Dikuelo | Monday August 1, 2022 06:00
Giving an update on the market, the CEO said orders in the first six months of the year exceeded the current nameplate production at Masama Mine, resulting in the group declining some orders.
Masama’s processing plant, which was successfully commissioned in October 2021, has a nameplate capacity of 125,000 tonnes of coal per month.
The surge in demand comes as European and Asian nations search for energy alternatives in the wake of the market disruption caused by Russia’s invasion of Ukraine.
According to du Plessis, in the last three months of the half year, the group successfully transported export coal and loaded two vessels of 30,000 tonnes each on a Free on Board basis from the Walvis Bay port in Namibia. In addition, Minergy also exported two trains from its siding at Tshele Hills on a Free on Rail basis to the Maputo port.
“The remarkable increase in demand for coal and high prices has benefitted Minergy late in the late half-year on the back of the supply into seaborne exports, directly translating to profitability,” he said. “On a standalone basis, May 2022 was the first month in Minergy’s history in which a profit was achieved at an operational level.
"The opportunity exists to maximise production capacity and sell products at optimum prices.”
The boom experienced in the coal market worldwide has allowed Minergy to position itself to mine and produce at full production capacity, which up until recently had to be managed within the confines of slowing demand experienced in early 2022, excessive inventories and plant limitations.
"Capacity was ramped up during the latter half of the second half of the year, which includes mobilising additional mining fleet and securing critical spares. “Full capacity is expected to be reached in July 2022 and thereafter on a sustainable basis," he said.
Meanwhile, the CEO said the group is executing a business plan aligned to capitalising on the unique opportunity presented within the environment of extraordinary energy shortages. He said this was on the back of the “world’s realisation of reduced dependence on a single energy source”, which has led to the recall of coal.