TerraCom Limited
TerraCom Limited
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Buoyant coal prices have delivered another solid result for producer TerraCom in the Dec qtr (Q2FY23), with its Australian and South African operations delivering a combined operating EBITDA of $A149.6M, down from $180.3M in the previous period.
Total coal sales were 2.06Mt, comprising 920,000t exports and 1.14Mt South African domestic – down from 2.34Mt (895,000t export and 1.45M domestic) in Q1.
Coal miner TerraCom has lifted Sept qtr (Q1FY23) sales from its South African and Australian operations to 2.34Mt, up from 2.19Mt for the prior quarter despite the loss of 14-days of dragline production at its Blair Athol mine.
The company blamed the Queensland state government’s new royalty regime, in addition to the lower production, for a fall in EBITDA to $A180M (Q4FY22: $224M). It calculated royalty costs at $56.1M ($29.8M).
Australian miner TerraCom remains on track for sales of 2.3Mt for the year to end-June at its Blair Athol thermal coal mine in central Qld after reaching an offtake agreement for up to 1.25Mt over 13 months to its long-term Japanese trading partner.
TerraCom says all Blair Athol production is fully sold until Oct 2022 and predicts total FY23 coal sales of 2.2Mt. It is targeting spot market sales for the remaining 450,000t in the last eight months of the year.
The continuing political uncertainty in Guinea following the military junta takeover late last year has led Australian coal explorer/producer Terracom to withdraw from all activities in the West African country.
Australian-based miner TerraCom posted managed production of 2.34Mt coal from continuing operations for the March qtr (Q3FY22), up from 1.96Mt in the previous period.
Export coal from its Blair Athol mine in Australia rose to 612,000t (Q2: 502,000t) while export and domestic output from its New Clydesdale Colliery, North Block Complex and Ubuntu Colliery operations in South Africa reached 1.72Mt (1.46Mt).
Exec chairman Craig Ransley says TerraCom’s combined operating EBITDA was an all-time high at $A123M.
The continuing strength of the export coal market, and recovery of South African domestic demand, have lifted Australian-based miner TerraCom’s Sept qtr (Q1FY22) managed production from continuing operations to 2.47Mt, from 2.33Mt in the previous period.
Export volumes from its Blair Athol mine in Australia were 565,000t (Q4FY21: 510,000t) while its South African mines delivered 803,000t (960,000t) for export and 1.67Mt (1.43Mt) for domestic sales.
Australian miner TerraCom has identified another 10 years of life for its Blair Athol mine in Qld after an independent review by Deswik Mining Consultants updated its proved and probable marketable JORC reserves to 19.5Mt. The estimate assumes a continuing 2Mtpa production rate.
Four years ago, when it brought the mothballed, ex-Rio Tinto mine back into production, TerraCom expected to get seven years at 2Mtpa out of the Bowen Basin deposit.
Australian-based coal producer TerraCom is progressing a business diversification strategy with the signing of an exclusive non-binding MoU over the potential multi-billion tonne Kalia iron ore project in the Republic of Guinea from its failed owner Bellzone Mining.
Bellzone proposed a $US865M development at Kalia producing 7Mtpa of 58% Fe fines over an initial 10 years before its inability to find buyers/backers led to its liquidation in 2018.
Australian-based TerraCom is confident its assumption of operational control and implementation of a new export strategy over the South African mines acquired through its 2020 takeover of Universal Coal will improve their performance and financial outcomes.
The establishment of a new export path to market resulted in the first full shipment of thermal coal from its 49%-owned North Block colliery in March.
(CORPORATE)
Australian-based management of coal producer TerraCom has taken operational management control of its South African mines in an attempt to overcome the financial and operational performance issues that dragged it to a heavy interim loss.