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Five years after being spun out of Anglo American, Thungela says longer-life assets, improved rail access and greater financial flexibility have put the company on a different path from the one envisaged at its listing.
Speaking to Business Day after the group’s interim results on Monday, CEO Moses Madondo and CFO Deon Smith said Thungela had fundamentally changed since its listing in June 2021 and was now focused on growth.
Madondo joined Thungela as CEO-designate in August 2025 and formally took over in November, succeeding July Ndlovu, who retired after serving in the role since the company’s listing. Smith has been with Thungela since its formation, having previously served as CFO of Anglo American’s Coal South Africa business.
Thungela’s weighted-average life of its mining assets was about 8.3 years when it was spun out of Anglo American, Smith said.
Since then, the company has invested in life-extension projects, including Annea and Zibulo North in Mpumalanga, extending the operating lives of its South African assets. Its acquisition of Ensham mine in Queensland, Australia, has also increased its exposure outside South Africa.
“Thungela redefined its own story. It said we will not die in eight years,” Smith said. “When we sit today, we no longer have a three-year residual life. We now have a multidecade life.”
The two executives said the outlook for coal has also changed materially since Thungela became a standalone company, with the global energy market moving between competing priorities of energy security, emissions and social considerations.
They said recent energy shocks, including the war in Ukraine and the disruption regarding the Strait of Hormuz, had demonstrated that coal remained an important part of the global energy mix.
“The world today says, ‘Thungela, we want you. We need your coal. We need your energy security,’” Smith said.
The comments came as Thungela reported an improvement in its first-half performance, with export saleable production rising 6% to 8.5-million tonnes and adjusted operating free cash flow reaching R1.9bn.
The company ended June with R6.1bn in net cash and R3.2bn in undrawn facilities, while declaring an interim dividend of R5.50 a share, its 10th consecutive dividend since listing.
Smith said the dominant narrative five years ago was that coal’s role was ending, but the energy-security shocks that followed had forced markets and governments to reconsider its place in the energy mix.
He said coal’s share of global energy consumption could fall while absolute demand remained significant for decades.
Resilience through the cycle
Thungela’s improved first-half performance was not solely a function of higher coal prices, Madondo said.
Production and sales volumes increased, Ensham delivered a stronger performance and rail conditions in South Africa improved. The company also benefited from lower operating costs in Australia.
Madondo said the underlying business had allowed Thungela to withstand the weaker coal market in 2025 and benefit when conditions improved this year.
“The foundations of the business are very strong,” he said. “That’s what’s giving this business the resilience to respond, whether it’s in down markets, as we saw in 2025, or in markets that are slightly buoyant this year.”
“The geographic diversification provided by Australia was one example, while the company’s ability to deliver projects on time and within budget was another source of resilience,” Madondo said.
Growth beyond existing mines
Thungela is now looking to use its financial capacity to grow, though Madondo said the company would remain selective about where it deploys capital.
“Our objective is to grow earnings,” he said. “To grow earnings, it means you must grow your portfolio.”
Importantly, he said the company was “targeting assets; not commodities, not geographies”.
Growth is not necessarily limited to thermal coal or South Africa and Australia, Madondo said, provided Thungela can add value to an asset and earn an appropriate return on the capital deployed.
The company is also looking at opportunities in its existing portfolio, including projects to expand or extend operations, while developing what Madondo described as “optionality” so that it can choose where to deploy capital.
Rail removes a constraint
Transnet Freight Rail’s annualised run rate on the North Corridor reached 59.9-million tonnes in the first half, up from 56.8-million tonnes in 2025.
Thungela sold 7.4-million tonnes into the South African export market, including 602,000 tonnes of third-party coal.
Smith said improved rail access meant Thungela could ramp up Annea and Zibulo North without having to worry whether it could get the additional coal to export markets. “For our business, it means we’re unconstrained,” he said.
Thungela’s improving operating performance has coincided with significant volatility in its share price.
Smith said the stock rose from the R90s at the start of 2026 to almost R180 in March, as investors changed their expectations for energy prices rather than reassessing the company’s underlying value.
Business Day
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