Thungela Resources Ltd. is seeking to buy more overseas assets, as rail bottlenecks hobble shipments by South Africa’s largest exporter of thermal coal.

Thungela — spun off from Anglo American Plc two years ago — posted record profit last year as European demand for coal surged following Russia’s invasion of Ukraine. However, the miner’s shares fell as much as 12% in London trading on Monday, after the company said it expects sales to drop for a second year as South Africa’s state-owned rail operator Transnet SOC Ltd. faces increasing problems on its main coal export line.

Thungela Chief Executive Officer July Ndlovu said the Johannesburg-based producer will consider purchasing both thermal and metallurgical coal assets amid worsening logistical challenges at home. Under a deal announced last month, Thungela and its co-investors agreed to acquire 85% of the Ensham mine from Idemitsu Australia Ltd. for A$340 million ($226 million). 

“We said we wanted to diversify for good reason and therefore will continue to look outside South Africa to future-proof our business,” Ndlovu said in an interview. “If we do get Ensham over the line, it contributes toward that cash generation potential which will allow us to look at all these opportunities.”

The CEO declined to say whether Thungela has found more assets to buy after agreeing to the Ensham deal.

Thungela’s coal shipments fell 10% to about 13 million tons last year, even as higher prices buoyed the miner’s revenue and profit. Those sales are expected to fall further as Transnet grapples with a shortage of locomotive spare parts and vandalism on the line that runs from coal fields in Mpumalanga to Richards Bay Coal Terminal on the east coast.

The miner’s profit more than doubled to about 18 billion rand ($990 million), boosted by record coal prices. Thungela said it will pay a total dividend of 13.8 billion rand, as it sees coal prices remaining strong despite softening this year.

The company said it could ship between 10.5 million to 12.5 million tons this year, which would be the lowest on record, Ndlovu said. Thungela has 3.2 million tons of stockpiled coal at its mines and another 400,000 tons at the port. The uncertainty regarding Transnet’s performance means Thungela couldn’t provide guidance for 2024, it said.

Thungela slumped 11% as of 11:42 a.m. in London. RMB Morgan Stanley said the miner’s guidance this year “is a little disappointing.”