Quarterly output of coal rises at KeatonComment on this story
Keaton Energy’s share price leapt in intraday trading on the JSE yesterday after it announced significant growth in coal production for its second quarter to September.
Keaton chief executive Mandi Glad said yesterday that production at Vanggatfontein colliery in Mpumalanga had increased 55 percent to 1.14 million tons in the first half of the year compared with the previous corresponding period.
The news sent the shares up by more than 18 percent to an intraday high of R2.20, before settling to close 4.84 percent higher at R1.95.
Production at the colliery grew 17 percent quarter on quarter to 616 668 tons of washed 2- and 4-seam thermal coal, the majority of which was sold to Eskom.
Glad said: “
Not only has Vanggatfontein settled into a steady-state production unit but secondary cash generating activities performed strongly as we optimised the mine.”
However, Glad added, “Vaalkrantz continues to be a difficult operation”.
Production at Vaalkrantz colliery was hit by challenging geological conditions and labour disruptions. Quarterly sales grew a modest 1.6 percent to 77 691 tons of anthracite.
Vaalkrantz sold 154 145 tons of anthracite for the first half of this year versus 175 797 tons for the previous first half.
Glad said she was optimistic about the future growth for the group.
Glad said Keaton was likely to finalise the R183 million acquisition of Australian-listed Xceed Resources’ projects in Mpumalanga shortly.
“It is pleasing that we will soon close the Xceed transaction and thereby acquire another major open-pit coal deposit adjacent to Vanggatfontein,” Glad said.
Xceed operates the Moabsvelden, Roodepoort and Bankfontein collieries in Mpumalanga. The deal is expected to improve Keaton’s Eskom-quality coal output and presents an opportunity for the company to enter the export thermal coal market.
Glad said the acquisition of Xceed, together with the company’s internal pipeline of development projects, provided a solid growth platform.
Keaton was founded in 2006, employs over 1 000 people, and its main customer is Eskom. The company plans to make several acquisitions in an effort to reach the production target of 5 million tons a year.