Optimum Coal posts sharply higher H1 earnings

Thu Feb 3, 2011 9:31am GMT, By Agnieszka Flak

JOHANNESBURG (Reuters) - South African miner Optimum Coal Holdings reported a surge in first-half earnings, boosted by higher production and output from the Koornfontein mine it bought last year.
Optimum Coal, one of South Africa's largest producers, said outlook for thermal coal remained robust, as global supply was constrained due to severe weather in other regions.
While many South African coal mines were hit by heavy rains in January, Optimum said its operations were stable after investing in pumps and other measures to control water.
"Our production, it might have suffered a bit, but the impact is lower than the previous year," chief executive Mike Teke said, adding he expected rainfall to continue through February.
Coal prices have been rising on fears that further disruption from cyclones would hit production of coking and thermal coal in Queensland, Australia, forcing buyers into the spot market for replacement cargoes.

While transport remains a challenge for Optimum and other South African coal miners, Teke said he was optimistic that logistics group Transnet would be able to transport more coal this year after derailments affected shipments in 2010.
Transnet has said it expects to transport 70 million tonnes to South Africa's Richards Bay Coal Terminal, one of the world's largest coal export terminals, up from the 63 million tonnes it managed to transport last year.
Optimum, one of the largest shareholders in the Richards Bay terminal, said headline earnings per share for the six months to end-December totalled 139.22 cents, compared with 6.59 cents a year earlier.
The company also said first-half group production rose by about 40 percent to 7.03 million tonnes of saleable coal, while export coal production rose by the same percentage to 3.6 million tonnes.
For the year to the end of June, Optimum said it expected export coal production of between 7.2-7.6 million tonnes.
Teke said the company, which listed in March, was evaluating potential acquisitions, though it had no concrete plans yet.
Optimum shares were up 1.8 percent at 33.60 as of 0857 GMT, outperforming a flat Johannesburg All-share index.
Shares of the company are up nearly 15 percent so far this year, while the All-share index is flat.(sourced:Thomson Reuters)