Exxaro’s coal business feeling the heat, but not ready to be extinguished

Exxaro, South Africa’s largest coal miner, expects to report lower production and sales in the first half of its 2023 financial year.

1. The company cited logistical challenges, high inflation, and lower coal prices as the main reasons for the expected decline.
2. The weaker rand, interest rate hikes, ongoing load-shedding, and lower demand from Eskom also contributed to the pressure on Exxaro’s coal business.
3. The miner expects the average benchmark export price from the Richards Bay Coal Terminal (RBCT) to be down more than half to $127.
4. Exxaro has decided to put its FerroAlloys business up for sale as it does not fit into its envisaged minerals business portfolio.
5. The miner will publish its interim results on August 17.