THUNGELA Resources could seek assets in other bulk mining products, said CEO Moses Madondo who added that a board decision will be made in June.
“We’re working through the strategy, and at the right time, probably after June once the board has applied its mind, we’ll come out with more clarity on what we’re doing,” he said in an interview with Miningmx on Monday.
He identified metallurgical coal and iron ore production as possible diversifiers to the 17.8 million tons the company mines and sells in thermal coal. The company wasn’t looking to incur heavy capital expenditure or take undue risk were it to diversify, he said.
“We are very disciplined stewards of capital allocation. So we will expand within areas where we know for sure we’re going to win,” he added.
BHP said in March that it was struggling to attract investment capital to its metallurgical coal mines in Australia some three years after the Queensland government implemented higher royalties on the coal business.
“I think met coal still has investors who are keen to support the right operator,” said Madondo. “From where we’re sitting … it is an obvious area for us to explore, especially in Australia. Met coal is something we are certainly interested in,” he said.
Thungela bought full control of the Ensham thermal coal mine in Queensland in Australia last year for A$48m having previously paid $335m for 85% in 2023. The mine produced just under four million tons of thermal coal in Thungela’s 2025 financial year.
Thungela has guided to 2026 production of 3.9Mt to 4.2Mt for Ensham and 13Mt to 13.6Mt from South Africa. Production in 2027 is expected to be broadly in line with 2026.
Asked whether the company had the capability to increase production into a higher trending thermal coal price, he said Thungela wouldn’t chase “spikes” in prices. But there was potential production growth in the firm’s newly commissioned Annea mine, known previously as the Elders project, and Zibulo North – both in South Africa.
“The opportunity is anything in the region of two million tons that we could possibly pursue across those assets,” he said. “It’s too early to come to the market and say here is exactly what the economic case looks like.”
Deon Smith, CFO of Thungela said in a media conference earlier today following Thungela’s full year results announcement that the company had returned to positive cash generation buoyed by improved coal prices in Australia and South Africa. This was amid energy security concerns caused by the US/Israel attacks on Iran.
“If we look at the screen today, API 4 [the South African export benchmark price] is around $112–$113 per ton – not yet as strong as we see in Australia where Newcastle [benchmark] is about $133/t,” said Smith.
Given South African all-in sustaining costs were about $100/t and $110–$115/t at Esham, Thungela was getting an operating margin of $13 and $18/t respectively. “The business is in really healthy shape from a cash generation perspective,” he said.
Thungela wrote down assets by R8.8bn for the 12 months ended June which resulted in a net earnings loss of R7.1bn. At the headline share earnings level, Thungela posted a year-on-year decline of 125% which came in at R6.47 per share.
South African export coal prices were 20% lower ($89.53/t vs $105.30/t in 2024) while Ensham reported a 17% fall in prices ($105.37/t vs $134.85/t previously). The weaker market was exacerbated by a strengthening in the rand and the Australian dollar against the US dollar during the period.
