Junior coal miner Wescoal, which counts power utility Eskom as its major customer, is counting on its Moabsvelden project in Mpumalanga to boost its production and sales in its 2022 financial year.
The relatively new Moabsvelden operation in which WestCoal has invested R228m produced 411,000 tonnes of coal in the three months to end-June, which marks the start of the 2022 financial year, from 187,000 tonnes in the December quarter.
Sales from the Moabsvelden operation surged 144% to 672,000 tonnes, Wescoal said in a statement on Wednesday.
The tonnage of coal produced from Moabsvelden is supplied to Eskom as part of the off-take deal, which runs over a 10-year period.
Sales to Eskom, which uses coal to generate electricity, were R2.14bn in 2021 financial year.
The quarterly update sent the share up 12.60% to R1.43 in early afternoon trade on Wednesday, valuing the company at R600.4m.
“Moabsvelden’s contribution to the group’s overall production and sales performance continues to increase as the boxcut construction phase edges closer to completion. The project is therefore expected to significantly improve the group’s performance for the current financial year,” the company said.
Wescoal is looking to restart Anort mine during the course of 2021. Wescoal has an effective 50% interest in the mine while Arnot Opco Proprietary holds the balance. The Arnot mine will supply both domestic and export markets.
Overall, mining output rose 23% to 2.24-million tonnes in three months to June 2021, compared with December quarter.
However, mining production dipped 2% year on year due to significantly lower production at Vanggatfontein and Khanyisa mines, Wescoal said in an operational update.
Mining sales were 24% better compared with the December quarter and 32% higher from the year-earlier period.
In the 2021 financial year, Wescoal suffered a loss of R36m, which was an improvement on a loss of R137m the year before.
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