11/11/2014 – Petmin ups quarterly output, sales

JSE-listed Petmin increased its production of metallurgical anthracite by 24% to 340 010 t in the three months ended September 30, compared with the same period in 2013, the company said in a quarterly update to the market on Monday.

The company reduced costs by 7% over the quarter, while sales increased 36% to 276 396 t, as demand for the group’s anthracite output held steady.

Petmin had sales commitments for one-million tons for the year to end June 30, 2015, from an estimated 1.2-million tons of production.

Despite the sales and production upswings, the group noted that the achieved anthracite price for product from its Somkhele mine, in KwaZulu-Natal, remained under pressure.

Export prices were some 15% lower than in 2013 and average domestic prices were down 3%.

“Despite tough market conditions, Petmin’s rigorous focus on safety and productivity improvements, and our ability to conclude material offtake agreements with reliable partners, have enabled Somkhele to perform well during difficult times,” commented Petmin CEO Jan du Preez.

He added that production of energy coal had increased 30% to 81 128 t for the quarter compared with the comparable three months of the prior year.

Demand for the energy product was “strong”, with 152 592 t sold in the period.

Somkhele produced energy coal from discard and has committed sales for all of its estimated 400 000 t of production for the year to end June 2015.

Petmin added in a statement that the Canadian pig-iron operation, the North Atlantic Iron Corporation (NAIC), had shortlisted two sites from 13 evaluated over the past 18 months in Canada and the US, for development of its merchant pig-iron industrial operation.

Both sites were on the Great Lakes, and Hatch Engineering would complete a comparative economic analysis before final selection and the start of a site-specific prefeasibility study.

Petmin business development director Bradley Doig noted that NAIC’s development up the value chain remained on track.

“Both sites offer significant competitive advantages and will secure the NAIC project at the bottom end of the cost curve and we look forward to selecting the site for our first plant,” he noted.

The unbundling and separate listing of NAIC remained on track and the distribution of the dividend with an estimated value of 50c per Petmin share remains scheduled for June next year.

Source – MiningWeekly.com