Terracom - Lipstick on a Pig, page-25

UNV have left seaborne coal as an option but you don't understand why they went down the domestic route and why therefore the leadership team is held in such high regard by shareholders.

They didn't go down the domestic route as they were too short sighted to see the benefits of seaborne coal, they went down that route for risk mitigation and they wanted to ensure they weren't exposed on margins. The supplier agreements they have are pegged to the actual price they receive from Eskom, ie, they maintain their margins regardless of spot prices. This is a risk mitigation method, in the same way that akmost every large scale resources company hedges risk through financial organisations. Ie. most companies never retain all price upside, as they want to ensure that they protect to the downside, just UNV have managed to retain their hedging methods in house rather than sell these externally to finance companies. There are billions of $'s spent annually on hedging techniques and UNV are just promoting the same.

They will increase their focus on seaborne coal (which they are doing now) dependent on Domestic demand and when prices increase.

I would much rather a BOD that focus on this than one that completely exposes themselves by not going down hedging techiques.