coking coal versus thermal coal, page-9

There is a partial alternative in steel making to coking coal called PCI coal, Pulverised Coal Injection. It's basically a very high quality thermal coal, or another way to look at it might be a coking coal without swelling properties.

CCC doesn't have any PCI grade coal though. The best stuff it produces is a reasonably high grade thermal coal (RB spec produced from Ferr and soon from Pen).

The new plan for DeWitt is to produce a slightly lower grade thermal coal that's below RB spec but still decent quality as far as Asian markets are concerned.

The less said about the Botswana coal the better. It's such low quality it hardly deserves to be called coal.

The project economics are that Penumbra should be profitable but a decent margin (check the last announcement), then Vlank and Ferrier is probably just breaking even.

Vlak is actually decently profitable in percentage terms. It's just that as domestic grade coal, the margin is always going to be low. That's why it doesn't generate much cashflow - it's not that it's in danger of actually swinging into loss-making territory.

Ferr is near the end of its life so it's not surprising it's barely breaking even. It's much more leveraged to the coal price than Vlak and I expect to see it keep swinging in and out of profitability depending on the RB price.