Moabsvelden a key target – KeatonComment on this story
THE commissioning of the Moabsvelden mine in Mpumalanga by the end of next year would be Keaton Energy’s biggest challenge, Mandi Glad, the chief executive of the listed coal producer, said yesterday.
Keaton’s headline earnings a share in the year to March turned around to a profit of 30.3c from a loss of 30.2c a year earlier.
The coal mining group’s portfolio includes the Vanggatfontein colliery about 3.5km from Moabsvelden in the Delmas area and the Vaalkrantz colliery in KwaZulu-Natal, through which it reaches the Brazilian anthracite market.
The greenfields Moabsvelden project is expected to produce 1.4 million tons of export and Eskom-quality thermal coal a year when it commences production next year. It is expected to reach a steady state in the first quarter of 2016, and support Keaton’s aim at producing about 5 million tons of coal annually.
“Moabsvelden represents a significant opportunity for the group to grow its Delmas footprint by utilising existing processing capacity, infrastructure and management at Vanggatfontein,” Glad said.
The undeveloped project was acquired for R195 million from Australian-listed Xceed in February.
Revenue rose by 49 percent to R1.37 billion as an improved operational performance at the Vanggatfontein colliery resulted in higher deliveries of thermal coal to Eskom and 5-seam metallurgical coal to domestic customers.
The Vanggatfontein colliery delivered 2.2 million tons of washed 2- and 4-seam thermal coal to Eskom, a 45 percent increase from the previous year. Sales of 5-seam metallurgical coal increased 49 percent to 97 635 tons.
Discard and slurry sales totalled 844 334 tons for this year, an increase of 86 percent from the previous financial year.
The Vaalkrantz colliery dispatched 303 837 tons of anthracite to domestic and international metallurgical markets, a 7 percent fall from last year.
“The operation continued to suffer from extremely difficult mining conditions in the West Alfred section of the mine, which limited production,” Keaton said.
An unprotected strike in August last year resulted in the group restructuring this operation and outsourcing the mining to a contractor which had 250 staff.
“Our steadfast efforts in turning this operation to profitability have started delivering results in the new financial year,” Keaton said.
However, Keaton shares lost 4.08 percent to close trade at R2.82 on the JSE yesterday and valuing the company at R541m.
Glad was not convinced that the share price reflected the company’s true value.
“Our business is solid. I don’t believe the share price is a reflection of our value. We have delivered superb results,” she said.