JSE-listed Thungela Resources Limited says Transnet Freight Rail’s (TFR) choice to challenge a precautionary power majeure associated to its coal rail service to Richard’s Bay Coal Terminal (RBCT) is not going to have a “material impact on its operational outlook” for 2022.
Despite the coal big’s assurance to the market in a Sens assertion on Thursday, the group’s share value slumped over 8% in morning commerce.
Thungela’s announcement comes after state-run ports and rail group Transnet’s freight rail division reportedly issued a discover on Friday April 8 to Coal Export Parties (CEP) linked proposed amendments to TFR’s service settlement with coal exporting firms.
Transnet has long-term coal transportation agreements with the coal exporters which are a part of the CEP grouping. However, in response to Thungela’s Sens replace TFR has notified the coal exporters that its current capability constraints – which incorporates these created by rife vandalism of the coal line – may forestall it from assembly its coal supply commitments.
Thungela notes that Transnet solely managed to ship 58.3 million tonnes (Mt) of coal to the RBCT in 2021, which is nearly 20 Mt lower than the RBCT annual capability of 77Mt.
“Transnet believes that these circumstances will continue to detract from its ability to perform for at least the next six months and that accordingly Transnet is under Force Majeure,” says Thungela.
“Transnet’s view is that the continued impact and duration of these factors actuate a termination right and expressed a desire to exercise this right to terminate the Agreements,” it additional factors out.
“Transnet however reiterated its commitment to continue to perform the rail services and has recently confirmed its commitment to work with the CEPs and RBCT to optimise and improve its performance,” Thungela provides.
Thungela – South Africa’s largest exporter of coal burned in energy stations – says it’s dedicated to partaking with TFR to know the present contractual place in addition to to make sure that coal deliveries to the RBCT stay steady.
The group confused that that is to ensure that it to have the ability to proceed to benefit from the present sturdy market demand the nation’s coal.
“With coal rail services and export sales continuing, notwithstanding the ongoing discussions between the CEPs and Transnet, Thungela does not currently envisage that this development will have a material impact on the group’s 2022 operational outlook which was published on 22 March 2022,” it notes within the Sens replace.