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WSL - Wescoal Holdings Limited - Trading statement

Release Date: 23/08/2010 08:37:27      Code(s): WSL
WSL - Wescoal Holdings Limited - Trading statement                              
WESCOAL HOLDINGS LIMITED                                                        
(Incorporated in the Republic of South Africa)                                  
(Registration number 2005/006913/06)                                            
(JSE code: WSL ISIN: ZAE000069639)                                              
("Wescoal" or "the company")                                                    
TRADING STATEMENT                                                               
In terms of section 3.4(b) of the Listings Requirements of the JSE Limited,     
companies are required to publish a trading statement as soon as they are       
satisfied that a reasonable degree of certainty exists that the financial       
results for the period will differ by at least 20% from the financial           
results for the previous corresponding period.                                  
Shareholders are advised that the company has achieved strong operational       
performance in the first quarter of the current financial year and this is      
expected to continue in the second quarter. Accordingly, shareholders are       
advised that at this stage the company expects that the earnings and            
headline earnings for the six months to 30 September 2010 will exceed 8         
cents per share, which is an increase of more than 50% compared to prior        
period earnings and more than 128% compared to prior period headline            
The financial information on which this trading statement is based has not      
been reviewed or reported on by the company`s auditors.                         
Update on operations and market review:                                         
Mining Division                                                                 
Khanyisa Colliery continues to perform well and during the period April to      
July 2010 extracted 400,000 tons of run of mine ("ROM") and supplied            
300,000 tons to Eskom. The operation is well on track to mine the stated        
target of 1, 2 million tons of ROM by 31 March 2011, with 900,000 tons          
being supplied to Eskom.                                                        
The division has however incurred additional overheads related primarily to     
health, safety and environmental issues with specific focus on water use        
and management. The division`s performance in these areas has been              
excellent and management wants this standard to remain and where possible,      
improve further.                                                                
During this period the group secured long term contracts to supply product      
to major users in both the cement and lime and municipal power generation       
sectors, which has only been made possible by the group`s move to a primary     
coal producer with sustainable resources.                                       
The recently announced acquisition of the Elandspruit reserve situated          
approximately five kilometres southwest of Middelburg, Mpumalanga will          
ensure coal sustainability for the next few years. It has an indicated          
resource level of 11,6 million tons of which 4.3 million tons is                
metallurgical type coal, 4.1 million tons thermal coal suitable for the         
inland and/or export markets with the remainder being Eskom type product.       
Trading Division                                                                
There have been positive developments for the trading environment with the      
API#4 export price holding steady at $90.00 for some time with a marginal       
weakening to $87.00 in the last week. Coupled to this, Transnet Freight         
Rail transported a record 5,93 million tons to Richards Bay Coal Terminal       
in July 2010 resulting in an increased focus on the export market by            
primary producers.                                                              
These developments have contributed to the first local price increase since     
mid 2008 of 10% on 1 July 2010 and management expects a further 10% to 15%      
price increase by 2011, however the exchange rate could reduce these            
In addition the division is experiencing increased demand from the local        
manufacturing industries which augurs well for an improved performance          
going forward.                                                                  
23 August 2010                                                                  
Exchange Sponsors                                                               
Date: 23/08/2010 08:37:27 Supplied by www.sharenet.co.za                     
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