Coal of Africa Ltd. fell to a 5 1/2-year low in Johannesburg trading after saying sales slid in the fiscal fourth quarter and thermal coal operations lost money.
The company slumped 11 percent to 3.26 rand by the close of trade in the South African city, the lowest since January 2007. Export sales of coal slid 9.3 percent on the quarter, it said today in a statement. Thermal coal prices fell in the period.
“It’s basically created a state of panic on where is Coal of Africa going to get funding to develop the Makhado and Vele assets if they have already raised all the debt they can at present,” Kamini Moodley, an analyst at Afrifocus Securities (Pty) Ltd., said by phone from Johannesburg. The market expected “some sort of cash flow” from thermal coal assets to fund growing capital requirements, Moodley said.
Coal of Africa is down 55 percent this year, the second-worst performance on the FTSE/JSE Africa All Share Index.
Exxaro Resources Ltd., South Africa’s second-biggest coal producer, has a 30 percent buy-in option for the Makhado project, which may ship 2.5 million metric tons of coking coal a year in its first phase, Moodley said. Coal of Africa said today Exxaro’s right to take the stake was extended to Sept. 30.
“If Exxaro doesn’t exercise its option for 30 percent of Makhado, where will it raise capital?” Moodley said.