Minergy Chief Executive Officer (CEO), Morne du Plessis says he expects the company to break even soon as it prepares to offload its first batch of sellable coal.
Speaking to Voice Money after the company’s financial results were released last month, du Plessis said Minergy is moving towards break-even point and beyond.
“So, it is our expectations that from the profitability perspective, we are looking at the last six months of our financial year. Profitability will be our focus for the next six months,” declared du Plessis, who was appointed Minergy CEO at the beginning of August following the resignation of Andre Boje.
Since listing on the Botswana Stock Exchange Limited (BSEL) in April 2017, Minergy has recordedonly losses as it was yet to start selling its coal.
Minergy becomes the country’s second operational coal mine after Morupule Coal Mine, whose products are used for power generation at Moupule Power Station.
But Minergy is eying a different market and is not concerned by international coal prices.
“For international coal prices, the export seaborne price is depressed, it has fallen from US$100 to around US$60, but that does not influence our price,” pointed out du Plessis, explaining that their price is different from the export market.
He said theirs is a ‘natural price’ influenced by normal economic supply and demand.
Indeed, the CEO stressed thatcurrent prices are actually good.
“We have seen that prices have been stable for four, five years now and we believe that there is actually a shortage of the coal that we supply for our target market. Our expectation is that prices will either remain at this level or increase going forward,” said the confident du Plessis.
In the meantime, du Plessis says the company does not intend to participate in either the export market or the power generation industry.
“Our market is the industrial market, and the industrial market is made up of players like cement producers, canneries, fisheries – basically anybody who uses boiler technology,” he highlighted.
However, the coal mining company is not ruling out the possibility of participating in the export market – something du Plessis says will be considered once the necessary infrastructure, such as the proposed railway line to South Africa, is in place.