The collaboration between big business and the government to turn around SA’s underperforming logistics sector is starting to bear fruit, with the country’s largest coal exporter Thungela bullish on its prospects after improvements in the rail network.
The rail network’s marked improvements saw Thungela report an increase in output at its SA operations for the six months to end-June.
The company expects export saleable production in SA to reach about 6.4-million tonnes, up from 6.2-million tonnes in the same period last year, it said on Thursday.
The group, which is undergoing a leadership transition, said rail performance in the first five months of this year enabled 55.5-million tonnes on an annualised basis for the industry.
This is a 7% increase on the 2024 full-year numbers of
51.9-million tonnes and a 17% improvement on last year’s
first-half performance.
The group, spun off from Anglo American four years ago, attributed the improved performance to greater efficiency by Transnet Freight Rail (TFR).
“The improved performance is mainly as a result of fewer security-related issues, improved locomotive availability and reliability, largely due to the additional locomotives introduced onto the North Corridor coal line,” CFO Deon Smith said.
“The signalling project is expected to commence in the second half of the year and this should further improve rail performance in 2026.”
The addition of further locomotives on the corridor bodes well for the industry, which has come together to assist TFR to get its house in order.
The coal industry in 2023 stepped in to provide financial assistance to cash-strapped Transnet to procure locomotive spare parts.
The lack of parts has hamstrung the performance of the rail, ports and pipelines operator over the past few years, costing the economy billions of rand and thousands of jobs.
The industry has helped provide permanent security to protect Transnet’s critical infrastructure.
Thungela’s balance sheet remains strong, with an expected net cash position of R5.9bn to R6.1bn as of June, excluding cash tied to unsettled Australian contracts. It also has R3.2bn in undrawn facilities, providing financial flexibility.
The company said it has distributed R1.4bn in dividends and completed a R328m share buyback earlier this year.
Operationally, Thungela continues to advance key projects. The Elders project in SA is ramping up export saleable production, while the Zibulo North Shaft remains on budget and on schedule for completion in 2026.
In Australia, Thungela acquired the remaining stake in the Ensham mine in March, and now owns 100% of the operation.
Ensham’s production was affected by challenging geology in the first half of 2025, resulting in export saleable output forecast at 1.6-million tonnes, down from 2.1-million tonnes in the same period last year. However, improvements were expected in the second half of the year, the company said.
Thungela has initiated restructuring at its Goedehoop and Isibonelo mines, which are approaching the end of their operational lives. Further details will be disclosed in the interim results due on August 18.
Smith said Thungela is on course to complete its capital projects to secure the future prospects of the business and to prioritise returns to shareholders.
“We are pleased with the improvements that TFR has demonstrated during the first half of the year and we remain optimistic on the expected improvements in the second half of the year,” he said.
“We remain confident in the long-term fundamentals supporting coal in the global energy mix and we remain committed in the near term to deliver on our productivity improvements and enhance the cost competitiveness of our business.”
Thungela’s coal primarily supplies markets in India, Asia, Southeast Asia, the Middle East and North Africa.
Earlier this year, Thungela announced a leadership transition with the planned retirement of its founding CEO, July Ndlovu, who will reach the company’s mandatory retirement age of 60 in July 2025.
The board appointed Moses Madondo as CEO-designate, effective on August 1.
Thungela's share price fell the most in about seven weeks on Thursday, down 3.52% to R84.03.
Update: June 26 2025
This story has been updated with more information.
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