Exxaro Resources faces challenges from rail disruptions and coal demand decline
Exxaro has forecast further declines in the international coal price for the second half of its financial year to December 31, 2025, due to global trade tensions, higher Indian coal production, higher gas and nuclear power output in Japan, Korea, and Taiwan, and sluggish Chinese offtake.
Image: Supplied
Exxaro Resources' immediate challenges includes South Africa's rail infrastructure, a decrease in coal demand from Eskom as well as the uncertainty created by the impending expiry of a 90-day import tariff reprieve granted by the US.
Trade regulatory uncertainty has moderated since April, positively impacting financial and commodity markets. Equity indices, crude oil prices, and the US dollar rebounded, said Riaan Koppeschaar, CFO of the coal, iron ore mining, and renewable energy group, in a pre-close statement released on Monday.
However. the 90-day reprieve on increased US import tariffs on South African goods is set to expire on July 9, 2025. During this period, South African exports to the US are subject to a 10% tariff instead of the previously announced 30%.
Koppeschaar noted that while South Africa's real GDP began the year slowly, with a 0.1% quarter-on-quarter expansion, there is optimism that economic activity will improve in 2025, despite the uncertain trade outlook.
Transnet Freight Rail (TFR) continues to experience disruptions, including cable theft, power failures, locomotive and wagon shortages, and deteriorating infrastructure. A rail wash-away in the first half of the year affected Grootegeluk, while a derailment further impacted throughput.
'Despite these challenges, the Richards Bay Coal Terminal volumes improved to 54.45 million tons per annum (Mtpa) for 2024, up from 52 Mtpa. Rail execution remains volatile but has shown improvement, particularly in the Mpumalanga region,' the group stated.
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Next
Stay
Close ✕
Eskom sales by Exxaro are expected to decrease by 15%, in line with Eskom's maintenance schedules. Koppeschaar indicated that for the six months ending June 30, the average benchmark API4 Richards Bay Coal Terminal (RBCT) export price is expected to average $91 per ton, compared to $110 per ton for the second half of 2024.
Iron ore fines prices are projected to average $100 per dry metric ton, slightly down from $101 per dry metric ton in the second half of the previous year.
Exxaro's total coal product and sales volumes are forecast to decline by 6%ay. and 7% in the first half, respectively, primarily due to reduced demand from Eskom. Coal capital expenditure is expected to be 19% lower, in line with capital replacement plans at Grootegeluk and Belfast.
Cennergi's wind assets are forecast to generate 335 GWh of electricity by June 30, 2025, down from 339 GWh at the end of the first half in 2024, and 386 GWh in the six months to the end of 2024. Construction of the 68 MW Lephalale Solar PV Project at Grootegeluk is underway.
As of May 31, the group held R19.5bn in cash, excluding R5.8bn in debt in the energy business. On May 13, Exxaro announced the acquisition of manganese assets from Ntsimbintle Holdings and OMH (Mauritius) Corporation, for between R9bn and R14.64bn. The transaction is expected to close in early 2026.
Thermal coal production is anticipated to decline by 4%, in line with Eskom's reduced demand at Grootegeluk. Metallurgical coal production is forecast to fall 24% due to above-normal rainfall and associated logistical disruptions. Tied mine production at Matla is expected to increase 18% mainly due to the early ramp-up of Mine 1.
Seaborne thermal coal prices are under pressure due to weak demand, exacerbated by lower natural gas prices, ongoing Russia-Ukraine peace negotiations, and broader concerns over new tariffs. By the end of the first half, the spot API4 price traded at around $90 per ton.
In the iron ore market, prices are being weighed down by tariffs on China's steel exports to the US, discussions on China's 2025 steel production limits, and broader US-China trade tensions. On the weaker coal markets, the group noted that Indian domestic steel producers are facing competition from cheaper imported steel, dampening demand for South African coal.
Meanwhile, Indian coal production has increased, largely supporting the power generation sector. Higher gas and nuclear power output in Japan, Korea, and Taiwan further reduced coal demand. This decline caused Australian prices to fall to a four-year low of $90 per ton, further aggravated by sluggish Chinese offtake.
The API4 index fell below US$90 per ton in the first half of 2025—a level not seen since the early days of the Russia-Ukraine war. Domestic thermal coal sales are expected to increase by 23%, driven by the redirection of export volumes to the local market and higher demand for other thermal coal products, mainly at Belfast and Leeuwpan.
Metallurgical coal sales are forecast to decline by 26% due to rail disruptions in the first half, caused by severe rainfall. Export volumes are expected to decrease by 10% due to rail disruptions caused by severe rainfall and a derailment in the first half.
Visit: www.businessreport.co.za
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Citizen
16 minutes ago
- The Citizen
Don't miss out: Register for City Power's free basic electricity programme
Don't miss out: Register for City Power's free basic electricity programme City Power is calling on qualifying residents to urgently register for its Free Basic Electricity (FBE) Programme, with the deadline of 31 July fast approaching. The programme provides 50 kilowatt-hours (kWh) of free electricity each month to vulnerable households, including the unemployed, pensioners, child-headed households, and those earning under R7 500 per month. 'This isn't just about electricity. It's about dignity,' said Tshifularo Mashava, City Power CEO. 'It's about a warm meal and a child doing homework under a light bulb instead of a candle.' Registered households will not only receive free electricity but will also be exempt from the R230 monthly electricity surcharge introduced in July 2024. To qualify, residents must meet specific criteria, including being a South African citizen or permanent resident. Applicants must legally occupy the property and be able to provide documentation such as title deeds or rental agreements. City Power's outreach teams are currently active across Johannesburg's seven regions to assist with registrations. 'We are ready to assist. Now, we need the public to act. We don't want anyone left behind,' said Mashava. Residents can register by visiting the City Power website or their nearest service delivery centre before the 31 July deadline. Don't miss this opportunity to secure essential benefits and financial relief. Qualification criteria • South African citizen or permanent resident • Legally occupy the property • Provide valid ID, proof of residence, a City of Johannesburg municipal account, and income verification • Earn under R7 500 per month (this includes all Sassa grant recipients) Benefits • 50 kWh of free electricity monthly • Exemption from the R230 monthly electricity surcharge • Assistance for residents with invalid IDs or unregistered meters Registration options • Visit the City Power website • Go to your nearest service delivery centre • Deadline: 31 July • For help, call 0860 562 874 to reach the Joburg Connect call centre, or email joburgconnect@ At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
The South African
an hour ago
- The South African
SIX things to know about SASSA Old-Age Grants in July 2025
Recipients of SASSA Old-Age Grants in July 2025 can look forward to their monies tomorrow (Wednesday 2 July 2025). While the payment cycle for SASSA Old-Age Grants in July 2025 would typically fall on the first Tuesday of the month, this July it's been pushed back by a day. As such, the first social welfare payout for the second half of the year sees over 75s get R2 330. And beneficiaries aged between 60-74 receive R2 310 for SASSA Old-Age Grants in July 2025. But there's more happening behind the scenes than many at the agency may be comfortable with clients knowing … SASSA Old-Age Grants in July 2025 do not fall on the first Tuesday of the month but rather one day later. Image: File For example, the South African Social Security Agency is on a drive to cut costs and reduce unnecessary wastage in 2025. Central to its approach to streamline SASSA Old-Age Grants in July 2025 is to verify the identity and income of all recipients. As such, the agency has embraced a new tactic for anyone flirting with its asset and income limits. If SASSA believes you've exceeded eligibility requirements, your grant will be withheld until you report to an agency office and present supporting documents. This flies in the face of previous SASSA edicts that all beneficiaries would receive three months' notice of an upcoming review. Therefore, let's get you up to speed on how to secure your SASSA Old-Age Grants in July 2025 … It's all change behind closed doors at the agency, as the three month review system appears to be largely ignored. Image: File It all started back in January of this year when the High Court ruled that SASSA may not exclude eligible applicants purely because of budget constraints. However, even legal action hasn't stopped the agency from taking leave to appeal the decision and push on with its stricter biometric verification processes. Unsurprisingly, civil justice organisations have been up in arms since May, when smartphone authentication for SASSA profiles began with little warning. Quite rightly, they argue you cannot expect SASSA recipients living close to the poverty line to have smartphones and internet access. Also, it's unfair that residents without a South African smart ID card (and digital photo on file) are being discriminated against. As the cost of living continues to increase, SASSA Old-Age Grants in July 2025 struggle to keep pace. Image: File Nevertheless, despite endless arguments over budgets, the 2025/26 financial year's R280-billion allocation remains unchanged. So, here's how you can apply for SASSA Old-Age Grants in July 2025: You must be over 60 to qualify SASSA Old-Age Grants in July 2025. to qualify SASSA Old-Age Grants in July 2025. Bring your official RSA identity document (ID). Provide all documents proving marital status. Show your proof of residence (a utility bill with your name on it). Any confirmation of proof of income and/or financial dividends. Up-to-date information regarding assets, valuation of property. Declaration of any private pension in your name. Valid three months' statement certified by your bank (no older than three months'). Unemployment Insurance Fund (UIF) membership book, or discharge certificate from your previous employer. A copy of your will, and first and final liquidation and distribution accounts if your spouse has passed away in the last five years. Due to improve cross-referencing, anyone with extra income or a new job will have to answer to the agency. Image: File SASSA will only support those with government money who do not have sufficient means through a private pension, income, savings and/or personal assets. Therefore, to secure SASSA Old-Age Grants in July 2025 you must adhere strictly to the following income and asset limits: Earn less than R8 070 per month ( R96 840 per year) if single. per month ( per year) if single. Earn less than R16 140 per month ( R193 680 per year) if married. per month ( per year) if married. Total assets must not be less than R1 372 800 if single. if single. Total assets must be less than R2 745 600 if married. Recipients queue outside a SASSA office hoping to have their grant issues resolved. Image: File Unsurprisingly, the Department of Social Development (DSD) is becoming increasingly strict on these mandatory requirements. In fact, parliament has enforced several additional mandated checks between SASSA, Home Affairs, Correctional Services, and Unemployment Insurance Fund. We understand from recent reports that as many as 200 000 SASSA clients have had to verify their details since these stricter verifications came online in May of this year. However, don't forget that if you are application for SASSA Old-Age Grants in July 2025 is unsuccessful, you do still have 90 days to appeal. Simply click the link HERE and complete all relevant documents before presenting them at a SASSA office in-person. Older Person Grant payment dates for the rest of the financial year. Image: SASSA Beyond this week's SASSA Old-Age Grants in July 2025, make a note of the year's remaining Older Person Grant payment dates. Barring October, the rest of the year's payments fall on the first Tuesday of each month: JULY – Wednesday 2 July 2025 (this week) (this week) AUGUST – Tuesday 5 August 2025 SEPTEMBER – Tuesday 2 September 2025 OCTOBER – Thursday 2 October 2025 NOVEMBER – Tuesday 4 November 2025 DECEMBER – Tuesday 2 December 2025 Be sure to leave a comment down below if you need any assistance with SASSA. Image: File Finally, if you cannot reach the agency through its toll-free number or WhatsApp, be sure to try the provincial contacts below: SASSA Toll-free number: 080 060 1011 SASSA WhatsApp number: +27 82 046 8553 SASSA Eastern Cape: 043 707 6300 SASSA Gauteng: 011 241 8320 SASSA Mpumalanga: 013 754 9446 SASSA Limpopo: 015 291 7509 SASSA North West: 018 388 4006 SASSA Free State: 051 410 8339 SASSA North West: 053 802 4919 SASSA KwaZulu-Natal: 033 846 3324 SASSA Western Cape: 021 469 0235 Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
2 hours ago
- IOL News
Working from home? Discover which expenses you can claim as tax deductions
More than 50% of the duties of employees working from home duties must be performed in the home office that is clearly defined and an exclusive workspace. Image: Image: Unsplash With the 2025 tax filing season looming, many South Africans working from home are asking what home office expenses they can claim as tax-deductible items and how to do it correctly. This question is especially relevant for the growing number of South African employees working remotely for global companies who are increasingly turning to tax practitioners for guidance, says Thokozile Kumalo, Tax Consultant at Tax Consulting South Africa. 'While home office deductions may seem straightforward, the Income Tax Act includes specific provisions regulating these claims. Commission earners generally have more flexibility, but salaried employees working from home often face challenges because of the more restrictive rules applying to them,' Kumalo said. According to Fine & Country Sub-Saharan Africa (SSA), what began as a temporary shift during the pandemic has evolved into a long-term lifestyle for millions, and the ripple effect was being felt across the real estate sector, where demand is growing for homes that seamlessly support this new way of living: flexible, tech-savvy, and lifestyle-enhancing. 'The future of work is hybrid, flexible, and mobile – and the homes we live in need to reflect that,' said John Herbst, the CEO of the luxury property for sale and expert service provider, earlier this year. 'We are seeing a clear shift in what buyers and renters are looking for – from built-in workspaces and tech to locations that offer not just beauty and tranquillity, but the infrastructure and services to support productive remote work,' Herbst said. She said that if you earn only a fixed salary, work from home full time, and use a dedicated space solely for work, there may be grounds for claiming home office expenses, provided you meet the strict requirements set out in law. The tax practice said the three key sections of the Income Tax Act that govern these deductions are: Section 11(a) – General deduction formula, Section 23(b) – Use of home for trade and Section 23(m) – Limitations for salaried employees. It said Section 11(a), often referred to as the 'general deduction formula,' allows a taxpayer who is "carrying on a trade" to deduct 'expenditure and losses incurred in the production of income, provided such expenses are not of a capital nature. In the context of a salaried employee, it said 'trade' includes employment. 'Therefore, an employee who earns remuneration is regarded as carrying on a trade in the form of employment. If a salaried employee incurs home office expenses in the production of employment income, those expenses will conceptually fall within the scope of Section 11(a). "It is important when claiming home office expenditure that Section 11(a) is applied in conjunction with the limitations imposed by Section 23.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading The tax consultant said Section 23(b) imposes a specific prohibition against claiming deductions for expenses related to premises used for "domestic or private" purposes. She said there is, however, an exception where there is a dedicated area used for the purposes of employment, that area is specifically equipped for such employment and the area is regularly and exclusively used for employment. For salaried employees (not commission earners), Kumalo said it is required that more than 50% of their duties must be performed in the home office and the home office must be a clearly defined and exclusive workspace. She said for full-time remote workers with a defined, exclusive home office, this meant they may qualify-in theory. Many salaried employees meet the conditions under Section 11(a) and 23(b), which often raises hopes for a successful claim, Kumalo said. She added that the biggest hurdle comes in Section 23(m), which disallows most deductions under Section 11 for employees who earn remuneration (i.e., salary) and do not earn more than 50% of that income as commission or variable-based remuneration. Tax Consulting South Africa said that for taxpayers who earn a fixed salary only, Section 23(m) prohibits deductions for most expenditure, losses or allowances that would otherwise be allowable under Section 11(a). It said only expenses directly tied to the use of the premises, such as rent, electricity, and cleaning, may be considered and only under very specific conditions. In short, Kumalo said, while Section 11(a) allows the deduction of qualifying expenses, Section 23 (b) adds strict conditions for home office use, and Section 23(m) disallows most deductions for salaried earners. 'In practice, this means that even if the general and home-office-specific conditions are met, fixed-salary earners are still barred from deducting most business-related expenses, including internet and cell phone costs, accounting fees, and stationery.' Sharing a professional tip, the consultant said if one is a fixed-salary earner working from home full-time and wish to claim deductions, they must ensure that their employer provides a formal letter confirming remote work, they have a dedicated, exclusive workspace, more than 50% of the duties are performed in that space and the claim is limited to premises-related expenses. Even then, Kumalo said SARS may still challenge deductions beyond the narrow exemptions outlined above. She said that, therefore, the onus is on the taxpayer to prove that the deduction should be allowed. The firm said that in preparation for the 2025 Tax Filing Season, taxpayers must be reminded that SARS applies the rules around home office deductions strictly and conservatively, particularly for salaried employees. Taxpayers are advised to consult a qualified tax practitioner before submitting any home office-related claims to avoid audit risk, disputes, and potential penalties, it warned. In May, Nomie Nxumalo, the executive head for people and transformation at Miway, said the integration of workspaces into personal residences brings about certain dynamics to home usage. She said many homeowners have invested in expensive office equipment, increased their reliance on home internet, and even started running businesses from their residences. However, failing to inform insurers about these changes could lead to gaps in coverage or even rejected claims in some cases. 'Most standard home insurance covers are structured around personal use of the home. Whether you're running a business or working remotely, it's crucial to declare to your insurer if a portion of your home is being used for business purposes,' Nxumalo said. 'Not doing so could result in your claims being declined or certain losses not being covered.' Independent Media Property
