By Dineo Faku - The Sunday Times – Business - 08 June 2025 - 00:00
Retiring Thungela CEO July Ndlovu says South Africa should have a sovereign right to include coal as part of its energy mix in line with how developed nations had built their economies.
In an interview this week Ndlovu said while the global north in Europe was phasing out coal, emerging communities like India, China, Vietnam, Indonesia and Bangladesh continue to invest in coal fired power stations underscoring coals runway.
“Does it make sense for a country like ours - which is a developing nation with a significant resource as coal - to walk away from the natural endowment? To what end then when countries with the biggest pollution burden like China and India continue to use coal… Why would we do that?”
The US was keeping its coal-fired power stations open to address grid reliability. “If a country like the US says they are not phasing out coal help me undestand why we as a country should?” They (developed countries) built their economies on the basis of coal energy, why don't we as a country have the sovereign right to do the same?” Thungela was established in 2021 when Anglo American demerged its South African thermal coal assets. Russia's invasion of Ukraine sparked A commodity supercycle and bumper profits for coal producers. While the Thungela share price has slumped due to coal low prices, the performance is still better than expected, given the day one share price was R21 a share. “We started off as a short-life business, most people did not believe we would be around today they kept saying, ‘really, you are listing a coal company, what are you thinking?’ In a short space of time, we've generated an enormous amount of value.”
Seven times
Since its listing in June 2021, Thungela’s share price has surged to the current R91. It went beyond R300 a share in 2022 amid heightening geopolitical tensions. Ndlovu said Thungela’s returns trumped its share price performance, pointing to the group's shareholder returns, the Elders Project expansion project and their acquisition of Ensham coal mine in Australia. “The issue is we have been able to return to our shareholders seven times our day one market cap, R22bn was returned to shareholders; in the same period, we invested close to R10bn in the Elders Project’ [we are] about to commission the Zibulo north shaft; we acquired Ensham.”
Thungela was hampered by the underperformance of Transnet Freight Rail, especially when coal prices peaked. He said Transnet was a good business but during state capture, the wheels came off. Still, South Africa was lucky: “If it had happened when prices were low, and having to cut production backwards, I think there would have been a bloodbath in the coal industry, but livelihoods were not lost.”
Ndlovu, a one-time chair of the World Coal Association, said Thungela remained committed to cutting its scope 1 and 2 greenhouse gas emissions by a minimum of 30% by 2030 despite criticism. Thungela came under fire for a toxic acid mine spill at its Khwezela Colliery’s Kromdraai site in 2022 but has estalished a fish breeding project to address harm to the ecosystem. “We did not hide, we acknowledged what we had gone wrong, and we said we would do whatever it takes to make it right and that is what we have done.” Ndlovu, said post his retirement he was looking forward to doing things to do the things he has always wanted to do. “I want to play golf in different golf courses around the world, and just experience different cultures,” he said. Ndlovu will be succeeded by Moses Madondo, the incoming CEO designate effective August 20.