JOHANNESBURG (miningweekly.com) – Based on current performance, coal-mining company Exxaro has upped the second half of the year volume of coal at delivery risk, owing the ongoing Transnet Freight Rail (TFR) challenges, to three-million tonnes.

“Previously we have highlighted what we believe will be the amount of volumes that would be at risk as a result of the ongoing TFR challenges as an amount of two-million tonnes of coal.

“Based on the current performance as we see it, our updated estimation is a further one-million tonnes in addition to the two-million tonnes, giving us a total of three-million tonnes of volume that will be at risk,” Exxaro CEO-designate Dr Nombasa Tsengwa said at Thursday’s presentation of results covered by Mining Weekly. (Also watch Creamer Media video.)

“We do, however, continue to engage TFR at all levels and we will update the market later in the year as to whether we believe the three-million tonnes will be changing in any way,” Tsengwa said.

“In as far as the markets are concerned, we can report good demand in the seaborne market during a period in which supply was disrupted on many fronts, leading to high prices last seen a decade ago.

“Unfortunately, Exxaro could not fully participate and capitalise on very robust pricing due to poor rail performance. However, we’ve made quite good progress in our export sales to other African countries,” she said.

India and Pakistan remain Exxaro’s two biggest coal export destinations, even though sales to India were negatively impacted by lower demand for South African coal, owing to the severe impact of the second wave of Covid 19, as well as the increased competition from the Australian exporters.

“The banning of Australian coal from China has resulted in China being our third biggest export destination. China is expected to be a viable market for South Africa as long as the Australian coal is under ban,” Tsengwa added.

Half-year export volumes declined by 34% as a result of TFR’s poor performance. The coal-mining industry, through Minerals Council South Africa, is engaged with TFR to resolve some of its challenges.