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Johannesburg - Optimum Coal, the takeover target of top
commodity trader Glencore, on Thursday forecast a better second half after
strikes at one of its mines hit output and led to a 45% drop in first-half
profit.
Optimum said headline earnings per share for the six months
to the end of December were 76.04 cents, compared to 139.22 cents previously.
Optimum said first-half production of saleable coal fell 16%
to 5.9 million tonnes.
Production of coal destined for exports fell 20% to 2.9
million tonnes, while output of coal destined for power utility Eskom slumped
11% to 3 million tonnes.
The company, South Africa’s sixth largest coal producer, cut
its full-year guidance for export saleable production from Optimum Collieries
to between 4.6 - 4.8 million tonnes on the back of the labour disputes.
The company had initially forecast for Optimum Collieries to
deliver between 5.3 - 5.5 million tonnes of coal destined for exports. The
revision should impact Optimum’s previous full-year guidance of total coal
output of around 13.7 million tonnes.
The company said that while export coal prices had recently
softened to about $105 per tonne due to what could be a prolonged European
recession, inventory re-stocking would support prices in the near term.
It also expected the domestic coal market to remain strong
with robust demand from Eskom ensuring strong uptake.
Coal producers targetting export markets have been squeezed
by lack of adequate rail capacity and delivery challenges faced by the
country’s state-owned logistics group Transnet.
Optimum said things were improving with Transnet’s freight
rail unit moving coal to the Richards Bay Coal Terminal at an annualised rate
of 70 million tonnes over the last five months of 2011.
Transnet also plans to free up additional capacity on the
coal export line by diverting all the general freight via a new line through Swaziland.
“This is extremely encouraging from a coal export and
project development perspective,” Optimum Chief Executive Mike Teke said in a
statement.
