London — South African miner Exxaro experienced subdued export demand in the first half of the year as a result of high international prices, according to its earnings report released Thursday.
Exxaro said the higher international coal prices have resulted in India, its "natural market," sourcing coal from Russia, the US and Australia instead.
The miner added that domestic trading conditions were favourable in H1 as producers experienced strong demand for higher quality product.
Sales volumes for thermal coal stood at 22.13 million mt in H1, an increase of roughly 5% on the year.
Of the total sales volume for H1, only 17.7% was sold to the export market, which was likely to have been drawn from stockpiles as no export volumes were produced in H1.
Sales to domestic power stations from commercial mines were up by 913,000 mt on year according to the report, as a result of the higher demand from the Medupi Power Station.
THERMAL COAL REVENUES UP
Exxaro's earnings report said coal revenues totalled Rand 12.24 billion ($842.5 million) in the first half, an increase of 17% on the year.
The company added that benchmark FOB Richards Bay 6,000 kcal/kg NAR prices had risen 23% on the year in H1 to $97/mt, which was a strong reason for coal revenue growth. However, revenues were partly offset by exchange rate variance between the rand/dollar exchange rate.
Another driver for revenue growth in coal sales was an increase in volumes to domestic utility Eskom.
The miner said the average price per ton achieved on exports in H1 was $79/mt, an increase of $14 on year.
Exxaro's met coal sales production stood at 585,000 mt in H1, an increase of 3% on year, while their production for the period came to 1.1 million mt, up 9% on year of which all was sold to the domestic market.
