The increase was recorded despite operational and labour challenges and price pressures in a difficult market. Normalised earnings were up 40 per cent while net cash flow from operating activities was up 129 per cent at R279 million compared to R122 million in 2012.
“Production of saleable anthracite at Somkhele mine in KwaZulu-Natal was up 86 per cent from the comparable six months in 2012 despite a prolonged strike, the impact of which was minimised by Petmin’s stockpile strategy. Production volumes at Somkhele are expected to improve by at least 20 per cent in the six months to 30 June 2014,” Petmin said in a statement.
The company reported that following extensive exploration, an independent SRK SAMREC and SAMVAL-compliant reserves and resources statement valued Somkhele at R1.64 billion at 1 December 2013 as reported on SENS on 3 March 2014.
During the six months under review, Petmin increased its stake in the North Atlantic Iron Corporation (NAIC) to 30 per cent. NAIC is a North American iron sands to pig iron industrial venture with a Preliminary Economic Assessment (PEA) due to be published by end-March 2014.
As reported in Petmin’s interim results, during the six months ended 31 December 2013 Petmin invested a further R40 million in NAIC, taking the carrying value of Petmin’s investment in NAIC to date to R189m at 31 December 2013.
“We remain strongly cash generative despite difficult conditions,” said chief executive Jan du Preez. “Petmin’s Somkhele anthracite asset has increased production at a materially reduced cost, despite 37 days of industrial action that cost Petmin approximately R10m after tax.”
“The expansion of our stake in NAIC to 30 per cent indicates our confidence in this North American industrial venture, which is concluding its Preliminary Economic Assessment and moving rapidly up the value curve.”
As reported in Petmin’s interim results to end-December 2013, Petmin was on 31 January 2014 granted a mining right for the Veremo pig iron project in Mpumalanga, in which it has a 25 per cent stake.
During the six months to end-December 2013, Petmin invested R58 million compared to R237 million in 2012 to deliver on its growth and diversification strategy.