Minergy through its 100% owned Masama Coal Mine, located in the Mmamabula Coalfield of Botswana, has exported more than 615,000 tonnes of coal in a 22-month period from late 2019.
According to group CEO Morne du Plessis, Minergy has benefited from the price momentum of a burgeoning commodity market, including South African coal, which has seen the highest export coal pricing in a decade. In addition, he said, average pricing has increased from a stronger South African rand, which resulted in higher pula recovered prices at the mine in the last six months and a better product mix featuring larger fraction products.
"A further 12-month offtake agreement was signed, supplementing the existing three-year offtake agreement in place. Both these offtake agreements are to operators in the South African cement industry. Additional offtake are currently being negotiated, including for the larger fraction products," he said.
However, the group plans to complete stage four of the Processing Plant (Rigid Screening and Stock Handling section) in August this year as completion was delayed as a result of a Southern African-wide shortage of structural steel.
"Completing this final stage will provide additional material handling and associated processing costs savings and stabilise supply at nameplate capacity," he said.
Further, the CEO noted that they aim to achieve nameplate capacity during this calendar year by completing the final ramp-up of operations. This will enable the company to generate sufficient cash flow to stabilise the business and break-even or better.
Minergy expects the momentum in the international coal pricing for southern African coal to remain in place. Higher coal prices have resulted in coal being withdrawn from the inland market to attractively priced international markets. The bullish coal market is also providing support.
According to du Plessis, the regional market is currently undersupplied, which supports pricing and new customer opportunities.
He said the booming commodity markets have allowed Minergy to reconsider a listing in London, with evaluations currently taking place to understand the best way to achieve this.
In addition, the CEO noted that the Eskom due diligence process is gaining momentum and Minergy looks forward to closing this out during the current calendar year.