The coal mineral is believed to be highly sought after despite market commentators projecting falling prices and diminishing industry. In the interim financial results for the six month period ending 31 December 2018, Minergy chairman Mokwena Morulane says during February 2018, physical coal shipments from Richards Bay Coal Terminal traded at USD98 per tonne, up 90 percent from the 2016 lows. The rise in prices is reported to be driven by lack of investment in new coal projects, thereby pushing prices higher. Another factor pushing coal prices higher is thought to be the decision by China to cut back some 500 million tonnes per annum in production and also increased demand for coal from new coal fired power plants. Regionally, Morulane says prices are at levels never seen before due to the lack of investment in new projects in the dominant coal producer, South Africa. The lack of investment in blamed partly on policy uncertainty and the talk around resource nationalisation. “However coal demand continues to rise, as it is still the most economical form of energy available. Regional end users are finding it difficult to source reliable and consistent supply as most producers are favouring the export market,” Morulane is quoted as saying. Minergy is in the process of developing a coal mine near Medie settlement in Kweneng District and it currently in negotiations with two contractors with the suitable candidate expected to be selected soon. Mining operations are expected to commence in July this year following the awarding of a Mining License which, has according to Morulane, been reviewed by the various departments and is awaiting final approval in conjunction with Environmental and Social Impact Assessment (ESIA). Minergy has stepped up its efforts to develop the mine and has already identified a company to build and operate the coal processing and washing plant and the tender has been given to a South African company called Pentalin Processing. The company is planning the final commissioning of the plant for September 2018. Subject to awarding of Mining License, Minergy plans to have 250 000 tons or run of mine available for processing through the washing plant by September this year that will produce 150 000 tons of sealable coal and thereafter 100 000 tons per month. Due to the current favourable coal pricing and product shortages, Morulane says Minergy has had numerous approaches to enter into off-take agreements with both regional end users and international coal traders which could elevate the required sealable product to in excess of 200 000 tons per month. Minergy’s ability to meet this increased tonnage, Morulane says, will be dependent on factors such as the availability of capital for expansion and projected coal pricing to 2021. For the period under review, Minergy board of directors did not declare any dividend as cash is utilised to ensure operations are in place. The company says it will only declare dividends once it becomes profitable and generates the free cash flow.