Thungela Resources has reported a full-year loss of R7.1 billion for the year ended December 2025, as R8.8 billion in non-cash impairments, a 20% decline in South African export coal prices, and a strengthening rand combined to overwhelm what was operationally a solid year for the thermal coal producer. The result marks a dramatic reversal from 2024, when the company reported headline earnings per share of 2,559 cents. The group declared a final dividend of R2 per share, bringing the total dividend for the year to R4 — a signal that management is committed to its distribution policy despite the headline loss, which is non-cash in nature and does not affect operational capacity or liquidity.
The impairment losses were taken across both the South African and Australian operations, triggered by lower long-run benchmark coal price forecasts and the relative appreciation of the rand and Australian dollar against the US dollar. Group revenue fell 17% to R29.6 billion. Adjusted EBITDA collapsed from R6.2 billion to R1.2 billion. The South African operations achieved an average realised export price of R1,336 per tonne, 20% lower than 2024, while the Ensham colliery in Queensland averaged R1,877 per tonne, 17% lower year on year. Headline loss per share came in at 647 cents against headline earnings of 2,559 cents in the prior year. The Richards Bay benchmark coal price fell 15% year on year while the Newcastle benchmark dropped 22%, driven by weak import demand from India and China as both countries leaned increasingly on domestic coal supply and alternative energy sources.
The pricing deterioration was structural rather than incidental. Thungela received $75.89 per tonne for Richards Bay coal in 2025, down from $91.56 per tonne in 2024, a 17% decline. Australian exports fetched $104.82 per tonne, $20 per tonne below the prior year. Chinese domestic coal production has expanded by approximately 8% annually in recent years, creating oversupply conditions that have pressured international pricing benchmarks broadly— a dynamic that has disproportionately affected South African thermal coal producers, whose cost structures are denominated in a currency that appreciated against the dollar precisely when dollar-denominated revenues were falling. CFO Deon Smith told analysts that the company has returned to positive cash generation in 2026, supported by improved coal prices in both Australia and South Africa, with the Richards Bay API4 benchmark trading around $112 to $113 per tonne and the Newcastle benchmark at approximately $133 per tonne — a recovery partly driven by energy security concerns linked to US and Israeli strikes on Iran.
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Against that backdrop, Thungela’s operational performance stands out. South African export saleable production reached 13.9 million tonnes, exceeding the upper end of guidance of 12.8 to 13.6 million tonnes, underpinned by strong performance at Mafube and the ramp-up of the Annea Colliery — formerly the Elders project — on which the group spent R1.8 billion. In Australia, Ensham delivered 4.0 million tonnes, at the upper end of guidance of 3.7 to 4.1 million tonnes, overcoming difficult geological conditions in the first half of the year. South African freight-on-board unit costs came in below the guidance range of R1,220 to R1,300 per tonne, while Australian costs landed in the lower half of the guidance band. Annualised coal deliveries into Richards Bay improved 9% year on year to 56.6 million tonnes, reflecting continued progress in Transnet Freight Rail utilisation after years of logistical constraint.
The two major capital projects — Annea Colliery and the Zibulo North Shaft life-extension — were delivered on time and within budget, with the R2.5 billion Zibulo project 96% complete and the residual R100 million of spend to be absorbed in 2026. CEO Moses Madondo said those completions, alongside the advancement of the Lephalale Coal Bed Methane project and targeted portfolio disposals, demonstrate the group’s ability to execute strategic priorities through a down-cycle. Madondo cautioned however that South African production would be approximately 500,000 tonnes lower in 2026 than 2025 as the group transitions through the ramp-up phase across its new capacity.
As detailed on Thungela’s investor relations page, Smith confirmed the group will maintain its dividend policy of paying 30% of adjusted operating free cash flow, but is weighing the retention of a cash buffer for capital projects or potential mergers and acquisitions. With all-in South African sustaining costs at approximately $100 per tonne and current benchmark pricing at $112 to $113 per tonne, the operational margin has recovered to around $13 per tonne — narrow but positive. At Ensham, where costs run at $110 to $115 per tonne against a benchmark near $133, the margin is approximately $18 per tonne. The group enters 2026 with its production base expanded, its capital programme largely complete, and a coal price environment that, for now, is moving in the right direction.
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