JOHANNESBURG (miningweekly.com) – JSE-listed Petmin underwent a significant rebound during the second half of the 2013 financial year, following a poor first half during which the company experienced disruptions owing to excessive rain and unprotected strike action, Petmin executive chairperson Ian Cockerill said on Monday.

An improved performance at Petmin’s Somkhele anthracite mine, in KwaZulu-Natal, led to a 92% increase in second half profit, excluding a R200-million impairment on the company’s Veremo project, to R58-million, compared with the 36% year-on-year fall in after-tax profit to R30-million reported for the six months ended December 31, 2012.

“While there is always room for improvement, to get to where we are now from where we were at the end of the first half of the year is a tremendous turnaround,” Cockerill told Mining Weekly Online.

Petmin on Monday reported an 18% increase in earnings a share from continuing operations, excluding impairments, to 15.25c.

Including the R200-million Veremo impairment, a loss of R112-million from continuing operations was reported for the year ended June, while after-tax profit for the year, excluding the Veremo impairment, was down 22% to R88-million.

He added that Petmin had strong cash generation over the financial year of R392-million.

Cockerill also pointed out that, while it was modest, Petmin continued to pay a dividend, despite difficult operating conditions.

For the 2013 financial year, the company declared a dividend of 3c a share.

OPERATIONS
Meanwhile, Cockerill also pointed out that Petmin now had three operational wash plants at its Somkhele operation.

The first two wash plants would be used to treat metallurgical coal and had a capacity of about 1.2-million tons a year, while the third plant, with a 500 000 t/y capacity would treat thermal coal.

“This year, we produced just over 800 000 t of metallurgical coal and 207 000 t of thermal coal. However, over the next year, we will aim to produce one-million tons of metallurgical coal and about 400 000 t of thermal coal,” he said, adding that the plants would then be running at 80% of their available capacity.

Cockerill pointed out that Petmin did not plan to run the plants at full capacity, as the company wanted to protect its margins and focus on quality.

Further, over the course of the next year, Petmin would aim to improve its yields from the pit at Somkhele, which would impact directly on the company’s bottom line and profitability.

“We would also like to ensure that we get our new-order mining licence for areas four and five of the operation. If we can get all that done, it will be a successful year as far as Somkhele is concerned,” he said.

Meanwhile, the company had also recently conducted smelt tests at its North Atlantic Iron Corporation pig iron project in Canada, with promising results.

“We should have the preliminary assessment concluded by the end of the year,” he said, adding that Petmin would then move towards conducting a bankable feasibility study over the next year.