South African coal concern Thungela's Chief Financial Officer Deon Smith said "It's worth noting that coal exports from RBCT into Europe have increased by about 720% from half a million tons in the first half of 2021 to 4.1 million tons in the first half of 2022."
Thungela said the high demand had driven its realized average price to $240 per ton during the half-year to June 30, compared to $75 a ton last year, boosting its profit more than 20 times versus the year before.
The company, which was spun off global mining giant Anglo American Plc in June 2021, said it would return 8.2 billion rand ($503 million) to shareholders after declaring a dividend of 60 rand per share, driving its share price more than 6% up.
The leading South African coal exporter and part of a consortium which owns Africa's largest coal export facility, the Richards Bay Coal Terminal (RBCT), Thungela said Europe was competing with Asia for South African coal.
In April, the European Union announced a ban on coal imports from Russia as part of sanctions for its invasion of Ukraine. The ban came into effect on August 10.
Ahead of the ban, European countries, which previously imported 45% of their coal from Russia and have been switching away from expensive natural gas to coal, started to source the fossil fuel from other countries, including South Africa.
Figures obtained by Reuters in June showed that European countries, chiefly the Netherlands, Germany, Poland, Denmark, France, Italy and Ukraine were importing growing quantities of coal from South Africa
Thungela CEO July Ndlovu, however, said South Africa could not fully take advantage of the strong coal demand due to the limited capacity of the state-owned rail company Transnet to haul the mineral to port.
As a result of the rail woes, Thungela has revised its production guidance for 2022 to between 13 and 13.6 million tons, from the previous 14-15 million range. The company is exploring the possibility of using trucks to haul coal to port.