Photo by: Bloomberg
JOHANNESBURG (miningweekly.com) – While the continued drought in KwaZulu-Natal is a concern for JSE-listed Petmin’s Somkhele operation, the miner still achieved a 4% year-on-year increase in the production of metallurgical anthracite in the three months to September 30, delivering 352 179 t.
Sales volumes also increased by 29% to 355 201 t as demand for Somkhele anthracite products remained firm.
The mining company said in a statement on Thursday that it would now focus on assessing and finding risk-mitigation factors for the potential impact of an extended drought on Somkhele and the surrounding community.
Meanwhile, energy coal production from the mine rose 6% year-on-year to 86 032 t for the quarter.
“Demand has been strong, with 85 190 t sold in the three month period,” the company said.
However, sales dropped significantly when compared with the same period in 2014, when Somkhele produced 81 128 t of coal, but sold 152 592 t. The company explained that energy coal sales in the September 2014 quarter included additional sales off stockpiles and was a result of timing differences as Somkhele built up stock for big shipments.
Average export prices for the quarter under review were 20% higher than in the comparative quarter of 2014, while average inland prices increased by 1% year-on-year.
“Export anthracite prices have historically traded at a 10% to 15% premium to the API4 index, and during the quarter ended September, this premium increased to 33% owing to supply constraints in key international markets,” Petmin said.
It further pointed out that the company had received sales commitments for 900 000 t of an estimated 1.2-million tonnes of anthracite production for the financial year to June 30, 2016. The remaining tonnes were under offer.
Further, sales commitments were received for 104 654 t of an estimated 350 000 t of energy coal production for the year to June 30, 2016 .The balance of these tonnes were also under offer and negotiations were expected to be concluded for all remaining tonnes.
NORTH ATLANTIC IRON CORPORATION PROJECT
During the quarter under review, Petmin invested a further $2-million in Canadian company North Atlantic Iron Corporation’s (NAIC’s) pig iron project, bringing its overall investment to $23-million for a 38% shareholding in NAIC.
Site engineering and design at the project were under way, in conjunction with other elements of the bankable feasibility study, which was expected to be finalised by June 2016.
It was envisaged that the first NAIC plant would be able to produce at a rate of 810 000 t/y of merchant pig iron using concentrate from Goose Bay in Canada’s Labrador province, or 874 000 t/y using higher-grade concentrate from other sources.