Optimum Coal boosts H1 output, says global thermal demand ‘robust’

By: Petronel Smit17th January 2011
JOHANNESBURG (miningweekly.com) – JSE-listed Optimum Coal produced 8,789-million tons of run-of-mine (ROM) coal during the first half of the 2011 financial year, an increase of 35% on the 6,493-million tons produced in the comparable period last year.
The South African coal miner on Monday reported that it had increased its export quality domestic production by 40% to 3,611-million tons in the six months ended December 30.
Optimum produced 3,422-million tons of Eskom quality coal, which was a 37% increase on the 2,500-million tons produced in the comparable period.
CEO Mike Teke said that the ROM production at Optimum Collieries had improved by 11,5% on the comparable period, despite having been affected by difficult cutting conditions and a reduction in cutting tempos resulting from drawn-out wage negotiations at the Boschmanspoort underground mine.
“Our opencast mines have been affected by the excessive rains experienced over recent weeks, although our water management structures and initiatives have mitigated against some of the operational impact,” he noted.
The comparable period production numbers did not include production from Koornfontein Mines, as Optimum Coal did not own Koornfontein Mines at the time.
Teke pointed out that Koornfontein Mines had proven itself a valuable addition to Optimum Coal since being fully integrated in March 2010, and was an important step in the company’s growth strategy.
“While local logistics remains challenging, Optimum Coal is working closely with Transnet Freight Rail and Richards Bay Coal Terminal to tackle the challenges,” he said.
Koornfontein Mines produced 1,515-million tons of ROM coal, 0,947-million tons of export quality domestic coal and 0,676-million tons of Eskom quality coal during the comparable period.
The outlook for thermal coal remained robust on the back of strong international demand, coupled with supply constraints across key coal-producing regions. Global demand had been boosted by the cold European winter combined with increased power generation and continued growth in Asian countries.
"We believe that global supply constraints will take some time to resolve, but that international thermal coal demand remains robust and sustainable. Optimum Coal is well placed to take advantage of these current market conditions,” Teke asserted.