All time records achieved in FY18
Despite changes in the coal portfolio, with some operations mining diminishing reserves plus delayed expansion projects, our optimisation initiatives are delivering value, particularly operational excellence and digitalisation. These record achievements position us well to launch into the next phase of volume and value growth as our projects become operational.
|Total coal product (Mt)
|Total exports (Mt)
|Total coal sales (Mt)
|Cash cost per tonne – Excluding Matla (R/t)
The average API4 price was strong for FY18. Although Exxaro's average export price for FY18 was higher than prior years, it was lower than the average API4 price for the review period. This was due to our product mix, which was affected by China's clampdown on Indonesian lower-grade imports. This, in turn, resulted in oversupply in the Indian market.
Cash cost per tonne
Cash cost per tonne was affected by higher labour, maintenance and project costs, as well as lower volumes.
In line with our portfolio optimisation strategy, our interests in Black Mountain and the Chifeng refinery in Mongolia remain non-core. We intend to ultimately divest from these investments.
In March 2018, we concluded an agreement to dispose of certain assets and liabilities of North Block Complex. The divestment from the Glisa and Eerstelingsfontein assets was finalised and Universal Coal took ownership of these assets on 1 November 2018. The mining right for the Paardeplaats portion was granted and we await approval (section 11) to transfer the mining right to Universal Coal.
In October, ECC sold all its shares and claims in Manyeka Coal Mines (majority shareholder in Eloff Mining Company) to Universal, which operates a mine next to the Eloff reserves.
For the Moranbah South coking coal project, Exxaro and Anglo American are still reassessing the potential development plan.
We are on track to achieve level 4 BBBEE status after implementing our enterprise and supplier development strategy. Benefits for recipients of financial support (from Gauteng, Limpopo and Mpumalanga) include an increase in their asset base, refinancing assets at more affordable rates to ease cash flow, and an improvement in business operations. We expect these businesses to increase their turnover and employ more people in the medium term.
Our social and labour plans (SLPs) are five-year community investment programmes with annual initiatives for co-investing with local government and other social partners. In 2018, we focused on education and infrastructure projects in our operational provinces:
We are studying implementation guidelines accompanying the new mining charter of September 2018 to determine the impact on Exxaro. This includes complying with the charter and meeting the aspirations of our stakeholders including shareholders, employees and communities adjacent to our operations.
We aim to complete a new share scheme for employees and communities in 2019.