SA on a precipice, says Thungela boss Sango Ntsaluba Thungela chair says clear, actionable and measurable steps must be taken to resolve the energy crisis and rein in illegal mining activities

Coal miner and exporter Thungela Resources has challenged government to act decisively to resolve the energy crisis and lawlessness that are costing the industry dearly.

Thungela chair Sango Ntsaluba, in the group’s annual report released on Wednesday, said it is important that clear, actionable and measurable steps are taken to resolve the energy crisis and rein in illegal mining activities.

“The newly appointed minister of electricity must take the necessary steps to ensure a reliable and consistent supply of electricity to all parts of the country. Illegal mining continues to be rampant across the SA mining industry and especially in the regions in which we operate,” Ntsaluba said.

“Thungela has not been spared from this criminal activity and we have seen illegal mining across our operations.”

Ntsaluba said electricity issues and illegal mining were dampening investor confidence in the sector.

“We call on government to work towards the resolution of these issues affecting SA industry and society, to tackle corruption, to hold management at state-owned entities accountable, and to urgently arrest the rapid deterioration of rail, electricity and other infrastructure. SA stands on a precipice, and not resolving these issues may push us over the edge,” Ntsaluba said.

Business Day reported in March that illegal mining in Mpumalanga continues to pose a challenge for Thungela. The company said during 2022 it had to spend R300m to rehabilitate areas that had already been completely rehabilitated before illegal miners moved in to operate the old mine shafts.

Old Mutual chair and former finance minister Trevor Manuel said last week: “There can be no doubt that SA’s rampant corruption, unchecked crime and alarming descent into lawlessness have been exacerbated by a lack of strong leadership and political will.”

Thungela’s strong financial performance in 2022, largely due to a surge in coal prices in the period, saw the group’s executives rewarded handsomely.

CEO July Ndlovu’s total remuneration for 2022 nearly doubled. Ndlovu earned R129m compared with R74m the previous year.

CFO Deon Smith was paid R66m from R36m the previous year. Thungela’s profit for the 2022 financial year surged 143% to R130.82 per share, or R17.5bn, in the year to end-December 2022.

The group declared a final dividend of R40 per share, bringing the total dividend for the year to R100 per share, amounting to total returns to shareholders of R13.8bn.

The benchmark coal price averaged $270/tonne in 2022, compared with $124/tonne in 2021.

Thungela’s remuneration committee said key financial and operational outcomes that were considered in relation to the remuneration decisions included adjusted earnings before interest, taxes, depreciation, and amortisation of R29.5bn from R10bn reported by the group.

Ben Kodisang, chair of the remuneration and nomination committee, said during the past year Thungela continued to deliver value in a complex and highly volatile environment.

“It has also seen Thungela really establishing itself as a value-creating company for all of its stakeholders. We are of the opinion that the remuneration policy achieved its objectives in 2022 and we look forward to engaging with our stakeholders to ensure we continue evolving and that our approach to remuneration enables the effective delivery of our purpose and strategy,” he said in the annual report.

Ntsaluba said four months into 2023, the group is concerned with the challenges that abound, including the performance of Transnet Freight Rail, the softening of coal prices and the volatility of coal demand worldwide.

“It is clear that coal prices cannot be expected to be as strong as in 2022, but the fundamentals for coal remain strong.”

Thungela was spun off from Anglo American in 2021.

https://www.businesslive.co.za/bd/companies/mining/2023-04-26-sa-on-a-precipice-says-thungela-boss-sango-ntsaluba/