THUNGELA Resources said on Tuesday it had concluded the buyback of about 3.25 million of its own shares for a value of about R328m.
Aimed at increasing the return on share earnings, the intention to conduct a buyback was announced at the coal miner’s annual results presentation in March.
Up to R300m would be bought this year following repurchases of R601m in 2024, equal to about 3.2% of issued share capital, it said at the time.
Shares in the company had been under pressure over the last month, however, falling nearly 8%. The company is currently worth R88.04 per share giving it a market capitalisation of about R12.4bn.
This is despite signs that the management of export volumes capacity on the Richards Bay line from its mines in Mpumalanga province was improving. Thungela has targed exports of about 13.6 million tons (Mt) for this year. This compares to last year’s 13.6Mt, (itself 11% higher year-on-year) amid a turnaround in the performance of Transnet Freight Rail (TFR).
The pressure on Thungela is thermal coal prices. According to a report by Reuters today Asia’s seaborne thermal coal prices have slumped to four-year lows. This is a result of the region’s heavyweight buyers China, India and Japan all importing less of the fuel.
China, the world’s biggest buyer of thermal coal, saw imports drop to 22.72Mt in April, down from 23.84Mt in March, said Reuters citing data compiled by commodity analysts Kpler.
Australian coal with an energy content of 5,500 kilocalories per kilogram (kcal/kg), a grade popular with Chinese buyers, dropped to $69.98 a ton in the week to May 2, said Reuters citing Argus. This was the first time the price had dropped below $70 since May 2021, and it is now 22.5% below the most recent peak of $90.29 from early October.
