SouthGobi Resources reports 223% increase in 2023 coal sales Company,  Production & Sales,  International 2024-04-18 11:53:20

SouthGobi Resources Ltd, a key Mongolian mining company, said its coal sales reached 3.59 million tonnes in 2023, soaring 223% from a year ago, according to the company annual operational report.


The company sold 2.08 million tonnes of high-quality semi-soft coking coal, a 670% surge year-on-year, and 530,000 tonnes of standard semi-soft coking coal/premium thermal coal, soaring 563% year on year. Additionally, sales of washed coal reached 980,000 tonnes, a 29% rise from the year before.


Benefiting from improvements in the Chinese market conditions, expanded sales networks, and diversification of customer base, the company achieved an average coal price of $93.02/t for 2023, a 42% increase year on year.


In 2023, SouthGobi Resources' coal production comprised 58% high-quality semi-soft coking coal, 15% standard semi-soft coking coal/premium thermal coal, and 27% washed coal. In comparison, the product mix in 2022 included 25% high-quality semi-soft coking coal, 6% standard semi-soft coking coal/premium thermal coal, and 69% washed coal.


Furthermore, the company's raw coal production in 2023 totaled 4.05 million tonnes, surging 487% from 2022.


SouthGobi Resources resumed mining operations at the end of 2022, and restarted coal washing operations in April 2023. Responding to market demand, it incorporated some high-ash coal into its semi-soft coking coal products for sale as washed coal in the market.


SouthGobi Resources achieved a revenue of $330 million in 2023, jumping 354% year on year. Factors contributing to this growth include the increase in coal exports to China's Ceke border port since the second quarter of 2023 and the rise in the company's average coal price from $65.7/t in 2022 to $93.0/t in 2023.


With increased sales and prices, the company's operating profit shot up 459% on the year to $75.87 million in 2023. It achieved a net profit of $0.91 million, compared to a loss of $30.42 million in 2022.


SouthGobi Resources plans to continue expanding its mining operations and production capacity in 2024 to capitalize on the anticipated growth in sales volume. The company maintains a cautiously optimistic outlook on the Chinese coal market, considering coal's important role as a primary energy source in China's foreseeable future.


However, it noted stringent environmental and safety requirements in China may limit coal supply and imports, potentially resulting in fluctuations in coal prices in the Chinese market.


SouthGobi Resources owns and operates the Ovoot Tolgoi coal mine in Mongolia and holds mining licenses for other metallurgical and thermal coal deposits in South Gobi province.


(Writing by Alex Guo  Editing by Harry Huo)
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