Despite market conditions remaining “extremely tough” for coal mining companies, JSE-listed Petmin delivered fairly strong results for the year ended June 30.

The miner reported headline earnings of 23.66c apiece, only slightly down from the prior year’s 24.28c apiece. It also maintained a healthy balance sheet, with cash on hand of R174-million, and a gearing level of about 7.6%.

CEO Dr Jan du Preez attributed Petmin’s results to this year’s performance at its 100%-owned Somkhele anthracite mine, near Richards Bay, stating that stable results carried the company through falling export prices, which dropped to around $55/t from $77/t in the past year.

The company expects the coal price to average $61/t over the next 12 months, down 5% from the $64/t it averaged during the last year. Further, Du Preez noted that Petmin had hedges in place for about $34-million.

Revenue for the year was slightly up to $1.28-billion, while profit from operating activities increased 6% to $230-million.

Meanwhile, production of saleable anthracite dropped by 7% in the year, as a dyke encountered in one of the three mining areas affected the quality and sizing of run-of-mine material in the first half.

This had a knock-on effect at the third plant, where throughput was affected by the finer material emanating from the mining areas. Production at the third wash plant was restricted during the first half to conserve process water, as the impact of the drought in KwaZulu-Natal had resulted in low water levels at the mine storage dams.

Despite these challenges, production costs per tonne were well-controlled in the year, increasing by 9% from 2015.

Petmin’s focus now remains on the development of the North Atlantic Iron Corporation (NAIC) pig iron project, in North America.

During the year, it invested $4-million into the project and it has now completed its $25-million stepped acquisition of 40% equity in NAIC. At the same time, various work streams continued with the goal of finalising the bankable feasibility study for the project.