031110 A new study has found that SA coal reserves have been significantly downsized since 2003.photo by Simphiwe Mbokazi 453

Johannesburg - Exxaro Resources, South Africa’s third-largest coal producer, reported an 11 percent increase first-half profit on higher exports and said prices are expected to remain under pressure for the rest of the year.

Headline earnings, which exclude one-time items, climbed to 7.93 rand a share from 7.12 rand a year earlier, the Pretoria-based company said today in a statement.

It announced an interim dividend of 2.60 rand, 11 percent higher than the same period last year.

A coal-supply glut has driven prices to the lowest since 2009.

Morgan Stanley sees the oversupply expanding to 14.9 million tons next year, from 6.8 million in 2014, it said in a July 8 report.

“Due to the international oversupply of both thermal and coking coal, coal prices are expected to remain under pressure for the rest of the year as there are still signs of additional supply coming onto the market,” the company said.

Coal exports rose 43 percent to 2.7 million metric tons during the period, the company said.

Production increased 4 percent to 18.8 million tons.

Port and rail agreements at the Mayoko iron-ore project in the Democratic Republic of Congo have yet to be completed, the company said, adding that it sees a weak coal market. - Bloomberg News