The export division represents a transfer pricing mechanism between the contract prices received for export coal and the prices paid to the mining operations. Kangra owns 2.3% (equivalent to 1.7 million tons per annum) throughput entitlement at the RBCT.
The mining operations produce approximately 3 million tons of coal per annum, of which approximately 2 million tons are exported through RBCT and the remainder being sold into the local market. A further 300 000 tons of entitlement is obtained through the sale of coal to Glencore. The export production is sold through two traders, namely Glencore and AMCI, and prices vary according to spot thermal coal prices.
The Savmore operation has a mine life of approximately 10 years and the Welgedacht operation has underground potential for a further 15 years. Additional mine life may be obtained through the acquisition of Anglo Coal’s Glenfillen reserves which are contiguous to Savmore. Kangra’s local production is mainly sold to Mondi, for use at their paper mills. This represents approximately 90% of Savmore’s inland production of +/- 600 000.
Kangra employs approximately 600 staff, 10 of which are located in the Melrose Arch head office in Johannesburg.