REG - Thungela Resources - Pre-close Statement

Thungela ResourcesAnnouncement

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RNS Number : 7282K  Thungela Resources Limited  09 December 2025

Thungela Resources Limited

(Incorporated in the Republic of South Africa)

(Registration number:  2021/303811/06)

JSE share code: TGA

LSE share code: TGA

ISIN: ZAE000296554

('Thungela' or the 'Company' and together with its affiliates, the 'Group')

 

Chief Financial Officer's Pre-close statement

for the financial year ending 31 December 2025

 

 

Dear Stakeholder

 

At Thungela, we remain unconditional on operating a fatality-free business. We
are pleased that our business has now operated for nearly three years without
a fatality, as we remain focused on ensuring that our employees go home
without harm every day.

( )

As the production profile in South Africa transitions, with the closure of
Goedehoop and the successful ramp-up of Annea Colliery (previously known as
the Elders project), as well as the hand-over of the Zibulo North Shaft
project to the operation, we are confident that we will achieve approximately
13.7Mt of export saleable production, which is above the guidance range of
12.8Mt to 13.6Mt. Our production momentum has also benefitted from consistent
rail performance and improvements by Transnet Freight Rail (TFR), with an
annualised 56.6Mt run-rate for the industry for the period ended 30 November
2025. This reflects an improvement of 9% on the 51.9Mt delivered in 2024.

 

At our interim results in August 2025, we reported that in Australia(1), we
had mined through more challenging geology at Ensham during the first half of
the year, which impacted qualities and resulted in a higher stockpile of lower
quality run of mine coal. Our marketing team in Dubai successfully secured
contracts for the lower quality coal which has resulted in improved sales and
lower stockpiles. Accordingly we expect to report export saleable production
of 3.8Mt at Ensham, which is within the guidance range of between 3.7Mt to
4.1Mt.

 

Global economic activity remains uncertain and influenced by the effects of
tariffs and persistent volatility surrounding international trade. These
factors, such as inflationary pressures, global economic sentiment and
financial market volatility, continue to weigh on overall growth. The impact
of the stronger South African rand is also affecting the competitiveness of
South African exports.

 

Seaborne thermal coal prices remain depressed on the back of weak demand,
caused mainly by the uncertainty around the impact of tariffs and lower gas
prices, while the supply discipline that was expected, has not yet fully
materialised. Demand from China and India, the largest importers of thermal
coal, remained below expectations for most of the year, as a result of
increasing domestic production and support for the growth of alternative
energy sources. Indian steelmakers faced growing competition from lower-cost
imported steel, which in turn reduced demand for South African coal and
further impacted prices. Increased gas and nuclear power generation in Japan,
Korea, and Taiwan further curtailed coal demand which contributed to Newcastle
coal prices recording a four-year low of approximately USD90 per tonne in
September 2025.

 

Following these low coal prices across South Africa and Australia, we have
observed initial restocking at major import hubs and a gradual recovery in
sentiment as reflected in the forward price curves which are now in contango
into 2026 and 2027.

 

The following are the key insights into our performance for the period 1
January 2025 to 30 November 2025 (the year to date(2)), and our expectations
for the financial year ending 31 December 2025 (FY 2025(2)).

 

•     Benchmark coal prices have weakened in 2025 with the Richards Bay
Benchmark coal price(3) averaging USD89.63 per tonne for the year to date,
compared to USD105.30 per tonne for FY 2024(2). The Newcastle Benchmark coal
price(4) has averaged USD105.11 per tonne for the year to date, compared to
USD134.85 per tonne for FY 2024.

 

•     Discount to the Richards Bay Benchmark coal price is approximately
15% for the year to date, compared to 13.1% for FY 2024. The average realised
export price for product sold through the Richards Bay Coal Terminal for the
year to date is USD75.89 per tonne, compared to USD91.56 per tonne for FY
2024.

 

•     Discount to the Newcastle Benchmark coal price has been
approximately 1% for the year to date, compared to a discount of 8.0% for FY
2024. The average realised export price in Australia for the year to date was
USD104.82 per tonne, compared to USD124.00 per tonne for FY 2024.

 

•     Export saleable production relating to our South African
operations is expected to be approximately 13.7Mt for FY 2025, compared to
13.6Mt in FY 2024. This production performance reflects the continued ramp-up
at Annea, strong performance at Mafube, offset by lower volumes from Khwezela
which was impacted by abnormally high rainfall in the first half of the
year.

•

 

•     FOB cost per export tonne excluding royalties for South Africa for
FY 2025 is expected to be below the guidance range of between R1,210 to R1,290
per tonne, mainly due to a non-cash rehabilitation adjustment and strong
production performance. The FOB cost per export tonne including royalties is
also expected to be below the guidance range of R1,220 to R1,300 per tonne.

 

•     Export equity sales for South Africa is expected to be
approximately 13.6Mt for FY 2025, compared to 12.6Mt for FY 2024. The increase
was enabled by the higher export saleable production and improved rail
performance.

 

•     Export saleable production at Ensham(5) for FY 2025 is expected to
be approximately 3.8Mt (on a 100% basis), compared to 4.1Mt in FY 2024. The
lower expected export saleable production in FY 2025 is mainly due to more
challenging geology experienced in the first half of the year.

 

•     FOB cost per export tonne excluding royalties at Ensham for FY
2025 is expected to be within the guidance range of between R1,470 to R1,580
per tonne. Including royalties, the FOB cost per export tonne is also expected
to be in the lower half of the guidance range of R1,650 to R1,780 per tonne.

 

•     Export equity sales for Ensham(5) is expected to be approximately
3.9Mt for FY 2025, on a 100% basis, compared to 4.1Mt for FY 2024.

 

•     Capital expenditure for the South African operations for FY 2025
is expected to be approximately R2,600 million. This consists of
R1,400 million relating to sustaining capital, which is at the lower end of
the guidance range of between R1,400 to R1,700 million, and expansionary
capital of R1,200 million relating mainly to the Elders and Zibulo North Shaft
projects, which is at the upper end of the guidance range of between R1,100 to
R1,200 million.

 

•     Sustaining capital expenditure at Ensham for FY 2025 is expected
to be approximately R650 million (on a 100% basis), which is marginally below
the guidance range of between R700 to R950 million (on a 100% basis).

 

The Group will undertake the annual assessment of the value of property, plant
and equipment (PPE) ahead of finalising the 2025 annual financial results. The
assessment requires significant judgement in relation to forward-looking
market-related conditions, specifically benchmark coal prices and foreign
exchange rates, which are currently at levels that does not support the
carrying value of our PPE balances. We will update the market once the
assessment has been completed, which is expected to be before the release of
our annual results.

 

Portfolio optimisation in South Africa

 

Our South African portfolio is currently in a period of transition, with the
closure of select operations where coal reserves have reached the end of their
economic life. We have initiated a disposal programme for assets where
remaining resources and infrastructure that retain value in use cannot be
fully utilised for our own economic benefit. We recently announced the sale of
Goedehoop North and we have also finalised a similar agreement at Khwezela's
Kleinkopje mining right. These transactions include the remaining resources
and related infrastructure. In addition, the rehabilitation liability
attributable to the areas being sold will also be transferred to the
purchaser, upon completion of each transaction. This showcases our ability to
successfully execute on our strategic priorities, ensuring that we reshape our
business and entrench resilience through the cycle.

 

Commitment to capital allocation framework

 

The Group has continued to invest through the cycle, which is demonstrated by
the completion of the Elders project, as well as the progress made on the
Zibulo North Shaft project. The Elders life extension project was completed in
2025 for R1.8 billion and we expect total aggregate expansionary capital
expenditure of R2.5 billion for the Zibulo North Shaft life extension project
by the end of the year. The balance of R100 million will be spent in the first
half of 2026.

 

We have made good progress at the Lephalale Coal bed Methane project and have
started to receive some of the major equipment, such as the first generator,
while the LNG plant is expected to be received by the end of the year. The
civil works and the water treatment plant are also complete.

 

The board has continued to prioritise shareholder returns and in 2025, we have
returned R2.1 billion to shareholders, through cash dividends and share
buybacks. During the year, we completed the share buybacks that were announced
at the full-year 2024 results and the interim 2025 results, resulting in the
purchase of 4,858,231 shares, representing 3.4% of issued share capital, for a
total consideration of approximately R468 million. These shares are held as
treasury shares by a subsidiary of the Group.

 

In line with prior periods, several transactions that typically conclude in
December are expected to impact our 31 December 2025 net cash(6) position.
These include the green fund contribution in Australia and the provisional tax
payments in South Africa and Australia. Our net cash balance at 31 December
2025 is accordingly expected to range between R4.9 billion and R5.2 billion.
The net cash balance range includes approximately R1.2 billion, on a full-year
basis, of cash generated relating from foreign exchange derivatives.

 

The board reaffirms its commitment to the Company's dividend policy, which is
to distribute a minimum of 30% of adjusted operating free cash flow(7) to
shareholders. Furthermore, the board will consider an appropriate cash buffer
which provides flexibility to invest through the cycle and prioritise
shareholder returns.

 

We acknowledge that in the current low price environment and the impact of
other macro-economic factors, cash preservation measures are required to
remain cost competitive while maintaining balance sheet flexibility. The Group
continues to spend sustaining capital in a responsible manner to preserve the
sustainability of the business and is committed to maintaining cost discipline
across the business.

 

Productivity improvements across the portfolio, coupled with the improvements
in TFR rail performance, has limited the production hiatus we previously
expected from the closure of Goedehoop and ramp-up of Annea in 2026. Export
saleable production in 2026 is expected to be approximately 0.5Mt lower than
the full year actual export saleable production in 2025.

 

We remain confident in the long-term fundamentals of the coal market,
recognising its role in the energy mix in support of global energy demand.
Together with a structural supply shortfall from underinvestment in new mines
and the depletion of existing supply, this remains a driver for longer-term
price support for high quality thermal coal.

 

The Group expects to release its annual results on or about 23 March 2026.

 

 

Deon Smith

Chief Financial Officer

 

 

 

Annexure A: Operational performance
 

 

Table 1: Export saleable production by operation

 Export saleable production  2024     2025          % change

 Mt                          Actual   Forecast(8)

                             (a)      (b)           (b-a)/a
 South Africa                13.6     13.7          1%
 Underground                 9.7      9.9           3%
 Zibulo                      5.0      4.5           (9)%
 Greenside                   2.3      2.3           (1)%
 Goedehoop(9)                2.3      2.6           17%
 Annea                       0.1      0.5           459%

 Opencast                    3.9      3.8           (3)%
 Khwezela                    2.2      2.0           (12)%
 Mafube                      1.7      1.8           9%

 Australia
 Ensham(2)                   3.5      3.8           10%

 Total                       17.1     17.5          3%

 

Table 2: Export sales by segment

 Export sales   2024     2025          % change

 Mt             Actual   Forecast(8)

 South Africa   12.6     13.6          8%
 Underground    9.2      10.0          9%
 Opencast       3.4      3.6           8%

 Australia      4.1      3.9           (4)%
 Ensham (100%)  4.1      3.9           (4)%
 Underground    4.1      3.9           (4)%

 Total          16.7     17.5          5%

 

 

 

 

 

 

 

Footnotes

 

1.   Following the completion of Thungela's purchase of the remaining 15% of
the Ensham Mine from LX International, the results of the Ensham Mine are
included in the Thungela Group results at 100% from 28 February 2025. Full
details relating to the accounting treatment applied to the Ensham Business,
including the acquisition of the remaining 15% interest, were provided in the
Interim Financial Statements for the six months ended 30 June 2025.

2.   "Year to date" refers to the period from 1 January 2025 to 30 November
2025.

FY 2025 refers to the period from 1 January 2025 to 31 December 2025.

FY 2024 refers to the period from 1 January 2024 to 31 December 2024.

3.   Richards Bay Benchmark price reference for 6,000kcal/kg thermal coal
exported from the Richards Bay Coal Terminal.

4.   Newcastle Benchmark price reference for 6,000kcal/kg coal exported from
Newcastle, Australia. The NEWC Index is the main price reference for physical
coal contracts in Asia and is the settlement price for a significant volume of
index-linked contracts.

5.   Production at Ensham is crushed and screened before being sold into
either the export or Australian domestic market. Sales into the Australian
domestic market are at export parity prices and, as a result, all production
at Ensham is considered to be export saleable production.

6.   Net cash, an alternative performance measure, is cash and cash
equivalents less restricted cash, which is cash held by the Group, that is not
held at the discretion of the directors.

7.   Adjusted operating free cash flow is net cash flows from operating
activities less sustaining capex.

8.   Based on the latest available management forecasts. Final figures may
differ by ± 5%.

9.   Export saleable production for Goedehoop includes approximately 556kt
(2024: 563kt) attributable to the Nasonti operation.

 

Review of Pre-close statement

The information in this Pre-close statement is the responsibility of the
directors of Thungela and has not been reviewed or reported on by the Group's
independent external auditor.

 

A trading statement will be released once the Group has reasonable certainty
on the expected ranges for earnings per share and headline earnings per share
and to the extent required by the JSE Listings Requirements.

 

 

Investor call details

A conference call and audio webinar relating to the details of this
announcement will be held at 13:00 SAST on Tuesday, 9 December 2025. A
recording of the audio webinar will be made available on the Thungela website
on the same date - www.thungela.com/investors.

 

Conference call registration:

https://services.choruscall.eu/DiamondPassRegistration/register?confirmationNumber=2082726&linkSecurityString=507358aa6

 

Audio webcast registration:

https://themediaframe.com/mediaframe/webcast.html?webcastid=3TYTQaBd

 

Disclaimer

 

This announcement includes forward-looking statements. All statements other
than statements of historical facts contained in this announcement, including,
without limitation, those regarding Thungela's financial position, business,
acquisition and divestment strategy, dividend policy, plans and objectives of
management for future operations (including development plans and objectives
relating to Thungela's products, production forecasts and Reserve and Resource
positions), are, or may be deemed to be, forward-looking statements. By their
nature, such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Thungela or industry results to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. The Group assumes no
responsibility to update forward-looking statements in this announcement
except as may be required by law.

 

The information contained in this announcement is deemed by the Company to
constitute inside information as stipulated under the market abuse regulation
(EU) no. 596/2014 as amended by the market abuse (amendment) (UK mar)
regulations 2019. Upon the publication of this announcement via the regulatory
information service, this inside information is now considered to be in the
public domain.

 

Investor Relations

Hugo Nunes or Shreshini Singh

Email: ir@thungela.com

 

Media

Hulisani Rasivhaga

Email: hulisani.rasivhaga@thungela.com

 

UK Financial adviser and corporate broker

Panmure Liberum Limited

 

Sponsor

Rand Merchant Bank (a division of FirstRand Bank Limited)

 

Johannesburg

9 December 2025

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