JOHANNESBURG (miningweekly.com) – As a result of the ongoing conflict in the Middle East, South Africa’s coal company Thungela is prioritising the safety and well-being of its 16 employees in Dubai, where the Johannesburg Stock Exchange-listed coal mining and marketing company has its international marketing base.

The ongoing conflict in the Middle East is “a matter of profound concern”, Thungela CEO Moses Madondo emphasised during a media conference following the company’s release of its 2025 financial results, which saw 17%-lower group revenue of R29.6-billion, in a year of strong operational performance but within the context of a challenging thermal coal market environment.

“The ongoing conflict in the Middle East following the US-Israeli actions involving Iran has raised new levels of uncertainty and has caused concern, not only for the global economy but for peace, safety and security in the region. We continue to provide support to our colleagues in Dubai, prioritising their safety and well-being,” Madondo reiterated on Monday, March 23.

In response to Mining Weekly, Madondo explained that Thungela’s 16 Dubai-based international marketing employees have been permitted to leave Dubai and operate remotely.

“The 16 people that work out of our Dubai business originate from a variety of countries, including Singapore and even Finland.

“While all of them are still essentially working through the Dubai office, they're working from home, whether that may be in Finland,” Thungela CFO Deon Smith explained.

Only three Dubai nationals remain with opportunities being sought to ensure their safety.

Meanwhile, product flow remains unaffected, and the business remains in a healthy shape from a cash generation perspective amid producing currencies strengthening owing to the US dollar weakening.

Operating free cash flow for 2025 was R396-million and net cash as at December 31 was R5.1-billion.

A final cash dividend of R2 a share has been declared, taking the full-year dividend to R4 a share. In the form of both dividends and share buyback, some 700-million is the total returned to shareholders in 2025, reflecting continued board confidence in the ongoing generation of returns.

Current coal prices point to greater cash generation than in the second half of last year, with cash now being generated on its way towards being highlighted in the 2026 interim results.

Thungela, which means to ignite, has operations in South Africa and Australia. In South Africa, a strong performance at Mafube and the ramp-up at Annea Colliery supported export saleable production of 13.9-million tonnes and in Australia, the overcoming of challenging geological conditions resulted in export saleable production of four-million tonnes.

Earnings before interest, taxes, depreciation and amortisation of R1.2-billion were generated and operational cash flow hit the R2.4-billion mark.

Regarding the availability of fuel for the company and Transnet during the supply chain disruption, Smith pointed out that it was not only fuel that was of concern to mining and transport companies but also a number of other energy inputs into its business, all of which were being closely monitored.

“Our estimates at the moment are that there should be sufficient fuel storage for the bulk users, and we have engaged our suppliers to give us confidence and comfort they are able to withstand the current supply crunch.

“It might come at a slightly incremental cost, but that cost for our business, given that we spend about 6% of all of our operational expenditure on fuel energy-related costs, isn't going to be as pronounced as what the tailwind is on our revenue,” said Smith.

Thungela has considerable storage across its mines and its key suppliers. The potential price impact of holding higher stocks for a bit longer and potentially paying the slight premium for energy security is unlikely to be excessive.

When it comes to rail logistics, only half of the rail line is powered by diesel and the other half is electrified.

“At the moment, we’re not concerned about the fuel energy situation, but we'll continue to monitor it closely over the next couple of weeks,” said Smith.

Thungela, which has a 23.56% direct interest in Richard’s Bay Coal Terminal, reported railing improvement as a result of better security as well as maintenance and the implementation of electricity infrastructure.

The company is continuing to work with Transnet on long-term programmes to ensure that improvement continues.

Thungela produces its thermal coal from five underground and opencast mines in Mpumalanga province, namely Greenside, Khwezela, Zibulo, Mafube and Annea. Thungela also owns 100% of the Ensham mine in Queensland, Australia.

Thungela’s capital allocation framework targets investing through the commodity cycle, while also prioritising returns to shareholders.

For three consecutive years, the business has been fatality-free but the group’s total recordable case frequency rate increased to 2.83 from 1.93. As a result, targeted interventions for increased risk sections and work crews through leading indicator heatmaps have been implemented.

OPERATIONAL PERFORMANCE

In South Africa, the free-on-board (FoB) cost per export tonne excluding royalties of R1 170 was better than guidance on productivity improvements and cost efficiency initiatives. In Australia, the FoB cost per export tonne excluding royalties of R1 435 was also below the guidance range on improved production and disciplined cost management.

PORTFOLIO OPTIMISATION

South Africa’s Annea Colliery and the Zibulo North Shaft life-extension projects were successfully delivered on time and on budget.

Annea now replaces production from Goedehoop Colliery, with employees and key equipment successfully redeployed to ensure uninterrupted skills and operational capability. Zibulo North Shaft has been formally handed over to the operations team, with production ramp-up underway.

The South African portfolio also continued its transition during the year. Goedehoop North and Isibonelo reached the end of their economic lives, with Isibonelo ceasing operations in December 2025, following the conclusion of its long-term domestic coal supply agreement, and subsequently transitioning to care and maintenance.

Goedehoop North is being sold and an agreement for the Kleinkopje mining right at the Khwezela Colliery has been concluded as part of an asset disposal programme.

Reducing scope 1 and 2 emissions by 30% by 2030 and reaching net zero by 2050 is being targeted.

The Sisonke Employee Empowerment Scheme and the Nkulo Community Partnership Trust will collectively receive R31-million in contributions, in addition to the interim contribution of R31-million.

The Thungela Education Initiative and the Thuthukani enterprise and supplier development programme strive for value beyond the life of the mines for host communities.

The International Energy Agency reports that coal is continuing to supply roughly a third of global electricity.