Coal news and updates

Petmin rises as coal sales and output improve

PETMIN’s share price lifted 9.5% to R1.27 on Tuesday after the company, which mines anthracite in SA and is developing an iron sands project in Canada, said it was able to boost coal sales and production while cutting costs at its Somkhele mine.

Sales of anthracite coal (946,013 tonnes) and energy coal (274,786 tonnes) were up by 35% and 420% respectively with increases in production for both.

Anthracite production rose 23% to 1,015,270 tonnes from 827,983 tonnes while energy coal production increased sharply to 270,801 tonnes and 171,100 tonnes. Average costs were cut by 9% to R634/tonne.

Petmin has mining operations in SA and is developing projects in countries such as Turkey, Canada and Liberia.

The focus of the firm is on exploiting mineral assets most closely aligned with urbanisation and the development that rapidly growing cities require. It specifically tracks assets development aimed at supporting steel production and its value chain.

Anthracite prices have also been higher than normal because of a shortage of supply, the company said.

Export anthracite prices have historically traded at a 10%-15% premium to its benchmark average price index, and during the quarter ended March, this premium has increased by up to 40% due to supply constraints in key international markets, Petmin said in a statement on on Tuesday.

The feasibility study for the North American Iron Corporation project is under way and final site selection is expected before the end of June, after which Petmin’s 36% holding in the project will be unbundled to Petmin shareholders.

In its update to shareholders the company said it was looking to make "investments" into thermal coal projects and "other projects that meet Petmin’s investment criteria".

"In particular (Petmin management) is reviewing opportunities that are cash-producing and or near cash."

source: http://www.bdlive.co.za