Minergy experiences exceptional turnaround in fourth quarter FY22

Loss-making trend replaced with profitability and positive cash flows

20 September 2022 – Gaborone – Minergy, the coal mining and trading company, today released results for the year ended 30 June 2022. The Group achieved combined revenue of P425 million (2021: P193 million), with cost of sales of P484 million (2021: P256 million). Pure coal sales, which exclude transport and Free-on-Board (“FOB”) cost recoveries, amounted to P297 million (2021: P167 million). Notably, for the first time since inception, Minergy extracted and processed over a million tonnes of coal in a single financial year at the Masama mine.

According to Minergy CEO, Morné du Plessis, the year under review was “historic”. “We had a challenging first three quarters followed by an exceptional turnaround in the fourth quarter, as many European and Asian countries looked for alternative sources of supply. As a result, Minergy’s high-quality coal became a sought-after commodity.”

Du Plessis said that the year had also been marked by several key events and trends, including the pay out of the final tranche of debt funding early in the financial year, and the conclusion of debt restructuring in support of stabilising the business.

“A highlight was the successfully commissioning of Stage 4 of the processing plant – the rigid screening and stock handling section –in October 2021, ending construction on the plant. The fully functional plant contributed significantly to a steady production environment, albeit restricted to available sales demand which did not support full capacity for the first nine months.”

In terms of market trends, du Plessis said that demand had been constrained for most of FY22 as the result of an oversupply of coal into the regional market because Transnet Freight Rail (“TFR”) failed to support coal dispatches into the export market via Richards Bay, a fact that has been widely publicised. “This situation was exacerbated by diminishing offtake from contracted key customers plant maintenance and breakdowns. Given this, mining and coal processing output rates were reduced to avoid coal losses through spontaneous combustion and limit cash-absorbing inventories. Outputs were further challenged by operational interruptions from freak rainfall in April 2022 and intermittent power outages.”

Then it all changed. Globally, the war in Ukraine created high coal prices at the end of the third quarter of FY22, as the energy markets came under severe security of supply pressure. “This led to extraordinary demand facilitating access to previously uncompetitive and uneconomical exports into the seaborne market during the fourth quarter. Reciprocally, with plant and mining capacity available, production was ramped up to meet this new burgeoning demand.”

Du Plessis said that hyperinflationary-like price increases of explosives and administered prices, such as diesel, had unfortunately reduced the positive effects of increased revenue. “Diesel and explosives increased by 127% and 57%, respectively, which was exacerbated by double-digit inflation in Botswana.”

“It must be noted, however, that the recovery recorded in the fourth quarter is setting the tone for profitability for FY23.”


Operating costs continued to show a decreasing trend and amounted to P19 million (2021: P23 million).

An operating loss of P74 million (2021: P85 million) was recorded, primarily due to the Group achieving breakeven in the last quarter, including individual month profitability, cementing a good foundation for the future. The cash or EBITDA loss was P58 million (2021: P74 million), representing an improvement of 22% from 2021 and a 39% improvement from 2020.

Net cash used in operating activities increased to P110 million (2021: P37 million) on the back of increased working capital investment, which contributed a swing of P91 million for growth in the fourth quarter.

Finance costs remain a challenge as a result of the skewed capital structure totalling P93 million (2021: P51 million), bringing the net loss after taxation to P132 million (2021: P107 million).


Pure coal revenue (ex-transport) increased by 77%, driven by a 40% volume increase, with average sales prices increasing by 26%.

A monthly sales volume record in excess of 75 000 tonnes was achieved in May 2022 on the back of destocking and FOB export sales.

Better product mixes supported sales into the seaborne thermal coal export markets, and Minergy successfully delivered two FOB vessels from Walvis Bay as well as exported coal via Zimbabwe to Maputo by rail.

Mining overburden moved and coal extracted increased by 82% and 54%, respectively. Processed volumes increased with increased mining volumes also supporting feed in excess of a million tonnes in a single year. “Pleasingly, water utilisation is improving, and we’ve achieved a 33% savings in litre per tonne consumption, justifying the investment in the dewatering screen, filter press and rigid screening section,” said du Plessis.

He added that mine rehabilitation is an ongoing process, with 4 million m3 rehabilitated in FY22. “This is exceeded the total volume rehabilitated since the start of mining operations.”


Minergy continues to uphold an outstanding safety record, having had only one minor lost time injury during FY22. “We are grateful to be fatality free on the back of strictly managed health and safety systems. COVID-19 remained a threat during the full year, with a total of 138 cases reported since the

start of the pandemic. Thankfully, all staff have fully recovered. High vaccination rates limit business interruptions.”

Minergy is committed to providing its workers with a safe work environment. As of the end of FY22, 97% of employees – 96% of which are Batswana – had been vaccinated.

“Corporate social responsibility remains core to the Group for communities in and around the mining area, as does supporting the Botswana economy. P488 million was spent on local registered company procurement this year, with P9 million paid in royalties and P5 million in local taxes. Minergy also has an active Citizen Economic Empowerment Plan in place, which yielded the utilisation of 22 local transporters. We continue to have a strong ethical base in place, which include a Whistleblowing Hotline.”


Looking towards the future, du Plessis said that Minergy is operating at production capacity of 125 000 tonnes of Run-of-Mine (“ROM”) with stable plant performance and export opportunities favouring a better product mix and pricing.

“Our strategy remains to operate at production capacity and maximise sales. Historically, plant and market factors limited us from operating at optimal capacities, but fortunes have now changed. This turnaround supports the expansion of mining operations to produce additional coal, and the mining fleet has been increased to capitalise on this. Opportunities to exceed production capacity and the resultant additional saleable production are being pursued.”

As coal export prices remain high on the back of the Ukraine war, Minergy continues to capitalise on viable export opportunities through Walvis Bay and Maputo through the establishment of new sales agreements with coal traders.

“Overall, the outlook for the coming year is positive and is forecast to be operationally profitable, as demonstrated in quarter four, which would be the first year for such an achievement after challenging start-up years.”