Petmin anthracite production down in FY2016

South African mining company, Petmin, recorded 1.236 million t of saleable anthracite production from its Somkhele mine in the financial year to June 2016 (FY2016), down from 1.335 million t in the previous financial year. The company sold 1.122 million t of anthracite.

Production at Somkhele was hit by a minor geological disturbance encounted in one of the three mining areas, while production from plant 3 was restricted during the first half of FY2016 to conserve process water during a regional drought in KwaZulu-Natal.

Rains have since replenished water supplies and the company reported “sufficient process water at full production for the foreseeable future”.

Petmin also produced 0.349 million t of thermal coal, down from 0.368 million t in the previous financial year. Thermal coal sales totaled 0.442 million t of coal – up from 0.352 million t.

“The steady performance of Somkhele is a result of the combined efforts of the management team, our employees and ht local community working together to ensure a stable and profitable environment,” said Petmin’s CEO Jan du Preez.

Looking forward, Petmin expects anthracite production at Somkhele to increase by 4% in the current financial year (FY2017), while sales volumes are expected to grow 20% as a result of sales of inventory built up in 2016.

Production costs are expected to increase by 6%, although this will offset by increasing prices on both domestic and export markets. Local demand is expected to rise 7%, while local prices are forecast to increase 3%. Meanwhile, a weaker rand against the dollar is expected to more than compensate for falling average dollar prices.

“We expect dollar prices for exports in the six months to 31 December 2016 to reduce by 19%, due to one-off sales from stockpiles while prices for the 6 months to June 17 are expected to be 9% higher than 2016, in line with current increases in global coal prices,” the company said.

Thermal coal production and sales are also expected to increase in FY2017 by 20% and 9%, respectively. The company is currently fully committed in terms of both anthracite and thermal coals with total committed sales volumes of 1.46 million of anthracite and 0.453 million t of thermal coal.

Edited by Jonathan Rowland.

Read the article online at: https://www.worldcoal.com/coal/05092016/petmin-anthracite-production-down-in-fy2016-2016-2372/