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IOL News
a day ago
- Business
- IOL News
Exxaro Resources faces challenges from rail disruptions and coal demand decline
Exxaro has forecast further declines in the international coal price for the second half of its financial year to December 31, 2025, due to global trade tensions, higher Indian coal production, higher gas and nuclear power output in Japan, Korea, and Taiwan, and sluggish Chinese offtake. Image: Supplied Exxaro Resources' immediate challenges includes South Africa's rail infrastructure, a decrease in coal demand from Eskom as well as the uncertainty created by the impending expiry of a 90-day import tariff reprieve granted by the US. Trade regulatory uncertainty has moderated since April, positively impacting financial and commodity markets. Equity indices, crude oil prices, and the US dollar rebounded, said Riaan Koppeschaar, CFO of the coal, iron ore mining, and renewable energy group, in a pre-close statement released on Monday. However. the 90-day reprieve on increased US import tariffs on South African goods is set to expire on July 9, 2025. During this period, South African exports to the US are subject to a 10% tariff instead of the previously announced 30%. Koppeschaar noted that while South Africa's real GDP began the year slowly, with a 0.1% quarter-on-quarter expansion, there is optimism that economic activity will improve in 2025, despite the uncertain trade outlook. Transnet Freight Rail (TFR) continues to experience disruptions, including cable theft, power failures, locomotive and wagon shortages, and deteriorating infrastructure. A rail wash-away in the first half of the year affected Grootegeluk, while a derailment further impacted throughput. 'Despite these challenges, the Richards Bay Coal Terminal volumes improved to 54.45 million tons per annum (Mtpa) for 2024, up from 52 Mtpa. Rail execution remains volatile but has shown improvement, particularly in the Mpumalanga region,' the group stated. Video Player is loading. 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Advertisement Next Stay Close ✕ Eskom sales by Exxaro are expected to decrease by 15%, in line with Eskom's maintenance schedules. Koppeschaar indicated that for the six months ending June 30, the average benchmark API4 Richards Bay Coal Terminal (RBCT) export price is expected to average $91 per ton, compared to $110 per ton for the second half of 2024. Iron ore fines prices are projected to average $100 per dry metric ton, slightly down from $101 per dry metric ton in the second half of the previous year. Exxaro's total coal product and sales volumes are forecast to decline by 6%ay. and 7% in the first half, respectively, primarily due to reduced demand from Eskom. Coal capital expenditure is expected to be 19% lower, in line with capital replacement plans at Grootegeluk and Belfast. Cennergi's wind assets are forecast to generate 335 GWh of electricity by June 30, 2025, down from 339 GWh at the end of the first half in 2024, and 386 GWh in the six months to the end of 2024. Construction of the 68 MW Lephalale Solar PV Project at Grootegeluk is underway. As of May 31, the group held R19.5bn in cash, excluding R5.8bn in debt in the energy business. On May 13, Exxaro announced the acquisition of manganese assets from Ntsimbintle Holdings and OMH (Mauritius) Corporation, for between R9bn and R14.64bn. The transaction is expected to close in early 2026. Thermal coal production is anticipated to decline by 4%, in line with Eskom's reduced demand at Grootegeluk. Metallurgical coal production is forecast to fall 24% due to above-normal rainfall and associated logistical disruptions. Tied mine production at Matla is expected to increase 18% mainly due to the early ramp-up of Mine 1. Seaborne thermal coal prices are under pressure due to weak demand, exacerbated by lower natural gas prices, ongoing Russia-Ukraine peace negotiations, and broader concerns over new tariffs. By the end of the first half, the spot API4 price traded at around $90 per ton. In the iron ore market, prices are being weighed down by tariffs on China's steel exports to the US, discussions on China's 2025 steel production limits, and broader US-China trade tensions. On the weaker coal markets, the group noted that Indian domestic steel producers are facing competition from cheaper imported steel, dampening demand for South African coal. Meanwhile, Indian coal production has increased, largely supporting the power generation sector. Higher gas and nuclear power output in Japan, Korea, and Taiwan further reduced coal demand. This decline caused Australian prices to fall to a four-year low of $90 per ton, further aggravated by sluggish Chinese offtake. The API4 index fell below US$90 per ton in the first half of 2025—a level not seen since the early days of the Russia-Ukraine war. Domestic thermal coal sales are expected to increase by 23%, driven by the redirection of export volumes to the local market and higher demand for other thermal coal products, mainly at Belfast and Leeuwpan. Metallurgical coal sales are forecast to decline by 26% due to rail disruptions in the first half, caused by severe rainfall. Export volumes are expected to decrease by 10% due to rail disruptions caused by severe rainfall and a derailment in the first half. Visit:
The Citizen
12-06-2025
- The Citizen
Elderly mother and son shot dead in KwaZulu-Natal
Police were on scene for further investigations. A mother and son have been shot dead in KwaZulu-Natal (KZN). ALS Paramedics spokesperson Garrith Jamieson said they responded to numerous calls of a shooting incident on Sarnia Road before Stella Road in the Hillary area on Wednesday at about 7:45pm. Crime scene 'On arrival, paramedics found Saps already in attendance and were shown into a house. Paramedics found two people believed to be a mother in her sixties and a male believed to be her son in his thirties who had sustained gunshot wounds to their heads. 'Paramedics assessed both of them; however, they showed no signs of life, and both were declared deceased on the scene,' Jamieson said. Jamieson said the circumstances leading up to the shooting are unknown; however, police were in attendance and will be investigating further. ALSO READ: Former Stellenbosch mayor Nyaniso Jindela shot dead Warrant of arrest Meanwhile, police have issued a warrant of arrest for Lucky Boitumelo Molefe, a former Transnet Freight Rail (TFR) employee, in connection with the murder of a 30-year-old engineer in Vereeniging. Armard Swart was shot in a hail of bullets while seated in his vehicle outside his workplace on 17 April 2024, allegedly by two suspects driving a white Hyundai i20. Police said Swart sustained multiple gunshot wounds and was declared dead on the scene. Swart was shot 23 times. Investigation Police spokesperson Lieutenant Colonel Vincent Mukhathi said an intensive investigation led by the head office organised crime team and crime Intelligence led to the arrest of four suspects, including one who was suspected to be behind the murder. 'It was reported that the suspects orchestrated the assassination in order to silence him after he blew the whistle about fraud and corruption that was linked to a Transnet tender contract. 'Molefe from Johannesburg has been in hiding since December 2024, and police have been searching for him,' Mukhathi said. ALSO READ: Two arrested and charged for IFP deputy chief whip's 'assassination'
TimesLIVE
25-04-2025
- Business
- TimesLIVE
Transport dept to spend millions to fix KZN's potholes and get bullet train on track
Fixing kilometres of potholes, getting a bullet train between Gauteng and Durban on track, fixing flood-damaged infrastructure, helping regional airports to fly and pushing for port efficiency is on the KwaZulu-Natal transport's bucket list to grow the province's economy. This emerged during the presentation of the department's R13bn budget for the 2025/26 financial year by MEC Siboniso Duma at the provincial legislature on Friday. Duma said the department will spend R9.2bn (over 70%) of the total budget on transport infrastructure; mainly the 34,405km provincial road network, of which 8,705km is paved and 25,699km unpaved. 'Over R 3.8bn will be spent on constructing new infrastructural projects, while over R 4.3bn will maintain our road network. Over R 102m will be spent on infrastructure planning and design, with over R927m being allocated to support programmes within transport infrastructure,' he said. He noted the paved network needed heavy investment in maintenance and rehabilitation including the patching of potholes. The department allocated a budget of more than R216.5m towards the programme of Black Top Patching in the current financial year. 'In the 2023/24 financial year the department procured 55 trucks at a cost of R103m to tackle the backlog of 3.12-million m2 of potholes,' said Duma. 'We intend to procure a further 25 trucks to reinforce our efforts to eradicate potholes on our network. The department has also appointed more than 100 road worker aids and foremen to be on the front lines in our fight against potholes.' Duma, together with KwaZulu-Natal premier Thami Ntuli and Umgungundlovu district mayor Mzi Zuma, launched the programme before his budget presentation. 'We are in the process of appointing a specialist automated road rehabilitation and pothole patching service provider to deliver a speedy means of pothole patching in strategic areas of our province. This exercise will contribute greatly towards the capitation and development of small contractors and employment of targeted labour.' A significant amount of the budget will be spent on repairing flood-damaged infrastructure, including the completion of rehabilitation projects in the Empangeni, Durban, Ladysmith Pietermaritzburg regions. Duma also revealed that upgrading freight and aviation networks in the province is among the key priorities for the department. He said they will work with national government and follow existing provincial policy initiatives to develop an effective freight transportation system to support economic growth in KwaZulu-Natal. The national department of transport divided Transnet Freight Rail into a Transnet Rail Infrastructure Manager (TRIM), which will manage and maintain rail infrastructure, and Transnet Freight Rail Operating Company (TFROC) which will open the market to third parties. Duma said they will align themselves with this arrangement and will have a dedicated team working with the national department and other stakeholders to undertake this work. 'Undoubtedly, this arrangement will ensure revenue generation to fund the rehabilitation of the rail network.' He said his department had earmarked two railway branch lines to revive: one in Durban Metro and another in Dr Nkosazana Zuma local municipality. Regarding aviation, he said they have been working with economic development to assist regional airports to grow and be compliant with the regulations of the Civil Aviation Authority (CAA). He reiterated the importance of the transport and logistics sectors for the local economy and stated that the two major KZN KwaZulu-Natal ports, Richards Bay and Durban, were central to it. 'Both ports are economically strategic not only to KwaZulu-Natal but also to the national economy since they are linked to the economic heartland of South Africa, Gauteng, via our road infrastructure. 'The Port of Durban is also a transit point for cross-border container traffic for our neighbouring countries and a gateway to Southern Africa. The ports of Richards Bay and Durban are important contributors to international trade and significant enablers of South Africa's and the province's economic development.' He said the proposed bullet train between Durban and Gauteng will be an exciting development that will bridge the gap between the two provinces and added that the department will be part of a Freight Indaba with other key industry stakeholders.
