(Reuters) -Global thermal coal producers are expected to curtail output as low prices for the fossil fuel persist amid an uncertain economic outlook, South African coal miner Thungela’s outgoing CEO July Ndlovu said on Monday.
South Africa’s top thermal coal exporter reported an 80% slump in its profit to 248 million rand ($14 million) in the six months to June 30, mainly due to lower prices for the fossil fuel.
Thungela said geopolitical tensions and rising tariffs were significantly disrupting global supply chains and constraining economic growth, hitting coal demand and prices. Neither the company nor Ndlovu elaborated.
Thermal coal prices have also come under pressure from a global shift away from the polluting fuel to cleaner energy sources, as well as increased domestic production in top import markets China and India.
The low prices could see further cuts in output after major producers in Indonesia and Colombia slowed down production while Australia’s production was hurt by accidents and bad weather, Ndlovu said.
“Further production curtailment is likely to aid rebalancing of supply and demand in the seaborne market,” Ndlovu said. “I expect supply discipline to continue going forward.”
The miner said average realised thermal coal export prices in South Africa and Australia declined by 11% and 10%, respectively, in the first half of 2025.
Thungela still expects to produce 12.8 million to 13.6 million metric tons of thermal coal from South Africa this year, and between 3.7 million and 4.1 million metric tons from its Ensham mine in Australia.
($1 = 17.6117 rand)
(Reporting by Nelson Banya; Editing by Joe Bavier and Emelia Sithole-Matarise)
