Today, Thungela Resources Limited ("Thungela" or "Group”) announced results for the financial year ended 31 December 2025. The results demonstrate another year of strong operational performance, highlighting our ability to control the controllables in a challenging thermal coal market environment.
Salient features:
Commenting on the results, Moses Madondo, CEO of Thungela, said: “Safety is our number one value and remains at the core of everything we do. The ongoing conflict in the Middle East following the US-Israeli actions involving Iran has raised new levels of uncertainty and has caused concern, not only for the global economy but for peace, safety and security in the region. We continue to provide support to our colleagues in Dubai, prioritising their safety and well-being.
I am pleased to report that we have operated a fatality-free business for three consecutive years. Our focus remains, ensuring that all of our people return from work, safe and healthy every day. The Group’s total recordable case frequency rate increased to 2.83, from 1.93, primarily due to the challenging operating environment during the production footprint transition. As a result, we have implemented targeted interventions for increased risk sections and work crews through leading indicator heatmaps.
We exceeded export saleable production guidance in South Africa and achieved the upper-end of the guidance range in Australia. In South Africa, export saleable production of 13.9Mt was supported by strong performance at Mafube and the ramp-up at Annea Colliery. In Australia, we overcame the challenging geological conditions of the first half of the year to deliver export saleable production of 4.0Mt. Group revenue declined by 17% year-on-year to R29.6 billion and the
Group generated adjusted EBITDA of R1.2 billion and a net loss of R7.1 billion, impacted by the non-cash impairment loss of R8.8 billion recognised against assets, reflecting lower benchmark coal forecasts, the weakening US dollar and the strengthening of the South African rand.
Despite the market environment, the Group generated R2.4 billion in cash flow from operating activities, remained free cash flow positive with adjusted operating free cash flow of R396 million for the year, and ended the period with net cash of R5.1 billion.
The Annea Colliery and Zibulo North Shaft life-extension projects were completed on time and on budget. Together with the advancement of the Lephalale Coal Bed Methane (LCBM) project and the disposal of assets, aimed at optimising our portfolio and further strengthening the balance sheet, this underscores our ability to execute on our strategic priorities.
Operational performance
In 2025, we delivered robust operational performance supported by continued productivity gains and disciplined cost management. The Group recorded export saleable production of 17.8Mt, approximately 175kt higher than the output achieved in 2024. In South Africa, the free on board (FOB) cost per export tonne excluding royalties of R1,170 was below the guidance range of R1,210 to R1,290, highlighting the productivity improvements and cost efficiency initiatives, partially offsetting the impact of inflation and operational transition costs. At the Ensham Mine, the FOB cost per export tonne excluding royalties of R1,435 was also below the guidance range of R1,470 to R1,580, demonstrating the improved production and disciplined cost management.
Portfolio optimisation in South Africa
We have remained focused on delivering on our strategic priorities. The Annea Colliery and the Zibulo North Shaft life-extension projects were successfully delivered on time and on budget. Annea now replaces production from Goedehoop Colliery, with employees and key equipment successfully redeployed to ensure uninterrupted skills and operational capability. Zibulo North Shaft has been formally handed over to the operations team, with production ramp-up underway. The South African portfolio also continued its transition during the year. Goedehoop North and Isibonelo reached the end of their economic lives, with Isibonelo ceasing operations in December 2025, following the conclusion of its long-term domestic coal supply agreement, and subsequently transitioning to care and maintenance.
In line with our portfolio optimisation strategy, we have initiated a disposal programme for assets where remaining resources and infrastructure retain value in use but no longer provide optimal long‐term economic benefit to the Group. We previously announced the sale of Goedehoop North, and we have also concluded an agreement for the Kleinkopje mining right at the Khwezela Colliery. This showcases our ability to successfully execute on our strategic priorities, ensuring that we reshape our business and entrench resilience through the cycle.
The Group also progressed the LCBM project, with commissioning of the modular liquefied natural gas demonstration plant scheduled for completion in the first half of 2026.
Thermal coal market dynamics
The seaborne thermal coal market remained under pressure for much of 2025, with weaker demand in key coal-consuming countries and sustained production levels from Indonesia, Australia and South Africa. Market conditions improved moderately towards year-end, supported by restocking and stronger demand from the Indian sponge iron market.
Against this backdrop, Group revenue declined by 17% year-on-year to R29.6 billion. The Group recognised a non-cash impairment loss of R8.8 billion against assets, reflecting lower benchmark coal price forecasts, the weakening of the US dollar and the strengthening of the South African rand. The impairment losses are non-cash in nature and do not affect the Group’s liquidity or operational capacity. Despite the challenging market environment, Thungela remained cash generative.
The Group generated R2.4 billion in cash flow from operating activities, remained free cash flow positive with adjusted operating free cash flow of R396 million, and net cash at 31 December 2025 was R5.1 billion.
Rail performance in South Africa
Turning to logistics, Transnet Freight Rail rail performance improved to 56.8Mt, increasing from 51.9Mt in 2024. Thungela recognises the tangible improvements achieved to date through collaborative efforts between Transnet, the National Logistics Crisis Committee and the coal industry. A stronger coal logistics system benefits the broader industry, supporting both established producers and emerging participants while reinforcing South Africa’s position in global coal markets.
ESG and community investment
Environmental, social and governance (ESG) remains fundamental to our strategy and operations. As a responsible environmental steward, we are committed to reducing scope 1 and 2 emissions by 30% by 2030, against a 2021 baseline, and to reach net zero by 2050. We are pleased to report that, in 2025, we recorded zero level 3 to 5 environmental incidents, the first time since listing in 2021.
In line with its purpose to create shared value, the Sisonke Employee Empowerment Scheme and the Nkulo Community Partnership Trust will collectively receive R31m million in contributions, in addition to the interim contribution of R31 million. Socio-economic development investments also remain integral to its purpose, with the Thungela Education Initiative and the Thuthukani enterprise and supplier development programme demonstrating our dedication to creating long-lasting, sustainable value for our stakeholders and helping to rebuild communities that thrive beyond the life of our mines.
Capital allocation and shareholder returns
Our capital allocation framework remains central to our strategy, and we prioritise returns to shareholders through the cycle. In 2025, we returned R2.2 billion to shareholders through a combination of cash dividends and share buybacks. During the year, we completed two share buybacks for a total consideration of R469 million, or 4,858,231 shares, which represented 3.5% of issued share capital.
We continued to invest through the cycle, deploying R747 million in 2025 to complete the life‐extension projects. To date, we have invested a total of R4.2 billion in the Annea Colliery and Zibulo North Shaft, as well as R382 million on the LCBM project, to position the business for long‐term competitiveness and value creation. The Group is not currently reserving cash to complete future capital expenditure commitments, as key life-extension projects in South Africa are now substantially complete.
A key element of our capital allocation framework is the cash collateralisation of our environmental liabilities. In South Africa, we contributed R203 million to the green fund and, in Australia, we made an additional R275 million contribution to an investment vehicle with a similar purpose.
The Group’s dividend policy is to distribute a minimum of 30% of adjusted operating free cash flow. In the first half of the year, the Group generated adjusted operating free cash flow of R484 million, however, in the second half of the year, we incurred a negative adjusted operating free cash flow of R88 million. This required the board to exercise its discretion in determining an appropriate ordinary cash dividend under the current circumstances.
The board remains committed to prioritising shareholder returns where the balance sheet allows for it and where future prospects of the Group remain supportive of such a distribution. Accordingly, the board has approved a final dividend of R2 per share, or R281 million. Together with the interim dividend of R2 per share, or R281 million, and the R139 million share buyback completed following our interim results, this brings total shareholder returns relating to 2025 performance to R701 million, representing 177% of adjusted operating free cash flow.
These distributions result in the Group maintaining a cash buffer of approximately R4.7 billion and holds undrawn credit facilities of R3.2 billion.
Looking ahead
In 2026, Thungela’s priorities remain clear: safety, operational excellence and capital allocation. The Group remains committed to operating a fatality-free business and to further strengthen safety performance through targeted interventions and a reinforced safety culture. Further, we will continue to focus on controlling the controllables, drive productivity improvements and improve cost efficiency, supported by the ramp-up of Annea Colliery and Zibulo North Shaft. Thungela’s capital allocation framework remains central to our strategy and prioritises maintaining balance sheet resilience, ensuring the long-term sustainability of our assets, by investing through the commodity cycle, while also prioritising returns to shareholders.
ENDS
Thungela’s Goedehoop Colliery handed over a new borehole and JoJo tanks as part of the mine’s Social and Labour Plan (SLP) commitments and ablution units to replace unsafe pit latrines as part of their Corporate Social Investment (CSI) projects. These facilities are both aimed at restoring the dignity of residents of Ward 4 and the Driefontein and Schoeman Farms, in the Steve Tshwete Local Municipality.
Tman Mphokane, general manager at Goedehoop Colliery, said: “Access to water and sanitation is fundamental to healthy and everyday living. Without this infrastructure, communities cannot function, and families face enormous challenges. It is for this reason that we embarked on this projects that aim to improve the dignity, health and quality of life for residence of this community.”
These projects were handed over to the residents of the Driefontein Farm to help with provision of a consistent water supply for surrounding households. Additional JoJo tanks were supplied at Schoeman Farm, with the municipality committing to ensure that the tanks are filled up going forward. Together, these upgrades will go a long way in improving the well-being of residents, contributing towards the Sustainable Development Goal of provision of Clean Water and Sanitation.
It is reported that in the Steve Tshwete Local Municipality, only 45.5% of households use flush toilets, but almost the same number, 47.6%, still rely on pit latrines. A further 2.4% use bucket toilets, and another 2.4% still use open bush areas for sanitation. Only 48.1% of households rely on water trucks as a main source of water – with a further 8.5% relying on bought or delivered water.
The Steve Tshwete Local Municipality welcomed the project and acknowledged its contribution to improved basic services. “This investment is a meaningful step forward restoring the dignity of residents, improving hygiene, and safeguarding groundwater sources in the area,” said Councillor Mhlonishwa Masilela, Executive Mayor of the Steve Tshwete Local Municipality. “Access to clean water and dignified sanitation is fundamental to the health, safety, and wellbeing of our residents. We value Goedehoop Colliery’s partnership and contribution, which is sure to make a lasting and tangible difference to our communities.”
“These facilities will strengthen essential services provision in host communities and reflect our support for socio-economic development in areas where we operate. This underscores our purpose to responsibly create value together for a shared future,’ said Tman.
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Mafube Coal, Thungela’s 50% joint venture with Exxaro, has constructed a 3,4-kilometre tarred road, connecting Ward 7 of the Sikhululiwe Village, to the R104 road in the Steve Tshwete Local Municipality, Mpumalanga. The R54 million investment forms part of Mafube Coal’s commitment to improve infrastructure in communities surrounding the operation.
The road construction project fulfils a commitment Mafube Coal made to the community following public consultation and engagement with the Sikhululiwe Village community. The community highlighted poor road conditions that make it difficult to commute, particularly during the rainy season. This affected service delivery in the area.
Tamara Qwatekana, Mafube Coal’s general manager, said: “Reliable Road infrastructure is a foundation for development. It allows communities to access opportunities and services with dignity. This investment reflects our continued commitment to building infrastructure that makes a lasting difference in the communities where we operate.”
“This new tarred road will improve the quality of life for the residents of the 400 households in the village, allowing easy access to essential services - reducing travel time and damage to motorists’ vehicles. Commuters will no longer find themselves stuck in the mud after heavy rains, with pedestrians forced to wade through water, just to get to where they need to go.” said Tamara.
The project was implemented in collaboration with local suppliers who in turn created 15 job opportunities during construction, empowering local plant suppliers, a fuel supplier. Sakhisene, a local SMME constructed the perimeter fencing along the road to prevent animals from crossing the road.
Thulasizwe Thomo, MEC of Public Works, Roads and Transport in Mpumalanga, said: This initiative is a great example of what can be achieved when government and the private sector work together. The project has strengthened the infrastructure that supports this community, enabling them to travel without damaging their vehicles, allowing easy access to the R104 that links the village to both Middelburg and Belfast.
Iddy Mahlangu, a Councillor from Ward 7, said: “We are truly grateful for Mafube Coal’s investment in our community. This road has transformed our village and will make traveling in and out of this area safer and easier, especially for those who need to reach schools and healthcare facilities.”
The completion of this road brings renewed hope for residents and small businesses alike, presenting opportunities for growth and expanding their reach and access to new markets.
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Our CEO-designate made his first public engagement at the Joburg Indaba 2025 in the segment, ‘In conversation with Moses Madondo’.
In his address, he highlighted the long-term fundamentals of coal, emphasising its role in energy resilience, industrial competitiveness and the long arc of human development. The truth is simple: the world needs energy, and coal remains a cornerstone in meeting that demand.
Thungela has shared an update on its Lephalale Coal Bed Methane (CBM) project, a significant domestic gas demonstration plant situated in Limpopo’s Waterberg coalfield. The programme, now in feasibility stage, has been under exploration since 1992 and remains South Africa’s only coal bed methane project, with five wells successfully simulated to date.
Thungela has initiated a capital investment of R400 million for the acquisition of a modular liquefied natural gas (LNG) plant and the associated site infrastructure, which will demonstrate the value in use of the gas resource. The LNG will initially be used to generate power at one of our operations, helping to reduce the impact of load curtailment during periods of electricity shortage.
The project has undergone extensive geological exploration, technical testing, and environmental monitoring over the years. Notably, it has produced comprehensive environmental datasets over the past twenty years, with no recorded incidents of water contamination. The project has demonstrated the technical viability of using low-pressure, low-volume hydraulic stimulation as a safe and controlled method for extracting gas.
July Ndlovu, Thungela chief executive officer said, “South Africa’s transition requires a balanced mix of energy solutions working together. Coal bed methane is part of that future, a reliable, lower-carbon gas source that complements renewable power and can potentially stabilise the grid, and fuel economic development. We have successfully completed a 10-year pilot production test, complemented by over 20 years of continuous water monitoring. This extensive work has yielded valuable technical insights into the geology and long-term environmental performance of the site.”
In January 2025, a bulk sampling programme was approved to assess the viability of liquefied natural gas (LNG) production and transportation. The licenses enabled Thungela to develop a demonstration plant at the LCBM project. Once commissioned, the modular liquefied natural gas plant will supply gas to a power generation facility to be deployed at one of our existing operations.
Minister of Mineral and Petroleum Resources, Gwede Mantashe, together with senior leadership from the Department visited the project site to see first-hand the progress made and the potential that this project could play in South Africa’s evolving energy system.
Minister Mantashe said: “Gas is vital for economic growth and a transitional technology in the energy mix. Adopting a balanced approach where the development of gas supply and environmental protection can coexist is critical. Oil and gas exploration is crucial to supporting South Africa's economic growth.”
Thungela welcomed the Minister’s remarks, noting that they reflect the company’s own approach to energy development, one that prioritises responsible innovation, environmental stewardship, and long-term value creation while supporting South Africa’s transition to a more sustainable energy future.
“Our vision for this project extends far beyond energy production. It has the potential to unlock further infrastructure investment, local business participation, skills transfer and development. Over time, it will stimulate the development of new industries and markets, drive demand for local goods and services, and strengthen municipal revenues fostering a sustained cycle of regional growth and economic resilience, said Ndlovu.”
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Thungela’s Elders project has delivered solar streetlights and portable inverters with solar panels to the communities of Vlakkuilen and Umcebo farms. The farms are in Ward 15 of the Govan Mbeki Local Municipality near Bethal, Mpumalanga. The solar streetlights and inverters are installed to improving visibility and boosting energy security for more than 450 residents across eighty-two (82) households in the community. This is an inaugural project that forms part of the Elder’s Social and Labour Plan (SLP), marking a new beginning in implementing initiatives to support community development in the area.
After conducting a community needs analysis and engaging directly with residents, it became evident that issues such as poor lighting, frequent power outages, and the detrimental effects across households, were major concerns raised by the community. Addressing these challenges is crucial for enhancing the quality of life and safety within the neighbourhood.
Tman Mphokane, general manager at Elders Project, said: “We considered a number of options to help power the community, and solar made the most sense. It is a solution that works well in areas where grid supply is not reliable. Most importantly, it allowed us to deliver a safe and consistent source of energy in places that had gone without it for far too long. Small-scale infrastructure like this has a visible and immediate impact. We remain committed to investing in projects that make a difference in communities that host our operations.”
In a collaborative effort with our business partner, Mecapol, we initiated a pilot project by installing five units to evaluate the effectiveness of the solar lighting technology. Following the successful completion of this assessment, the project was seamlessly expanded to its full implementation.
Councillor Nhlakanipho Zuma, executive mayor of the Govan Mbeki Local Municipality, said: “The success of this project is testament to what is possible when government and the private sector work in partnership to improve the lives of community members. This initiative has instilled a sense of security in our communities and contributed meaningfully to improving the dignity and quality of life of our residents.”
Sibongile Motau, a community representative, said: “We are grateful to Thungela for this investment that has made our community safer. The solar lights have created visibility for people returning from work in the evenings, allowing them to walk with more confidence; children can get home safely from school, and elders are able to move around after sunset without fear. Residents now have a greater sense of security. The portable inverters have also greatly improved the livelihoods and dignity of the residents.”
The R2 million project created ten temporary jobs during implementation, employing five community members from each village, and we are proud to report that all the units are fully operational. This project reflects Thungela’s commitment to enhancing access to essential services in the communities where we operate.
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Thungela, meaning 'to ignite' in isiZulu, is a global pure-play producer and exporter of high-quality, cost competitive thermal coal, with operations in South Africa and Australia. We focus on high-quality coal reserves and marketable production, positioning ourselves as a key player in the global energy market by delivering coal through world-class ports, powering nations.
Our ESG approach supports our purpose to responsibly create value together for a shared future. A robust ESG framework underpins our licence to operate. Establishing and committing to a comprehensive ESG framework with associated targets is one of Thungela’s five strategic focus areas.
