South Africa's coal producers are benefiting from higher global energy prices

South Africa’s coal miners are having a better run after a difficult few years. Coal prices have picked up as the conflict involving Iran puts pressure on global energy markets. At the same time, South African miners are moving more coal by rail. That combination is showing up in company results. Thungela Resources reported a 150% increase in headline earnings per share for the first half of 2026. Its net profit also rose more than five times. Higher coal prices helped. So did stronger production and better rail performance.

Getting coal out has been the problem

South Africa has plenty of coal. The problem has often been getting it from the mines in Mpumalanga to the Richards Bay Coal Terminal. Transnet’s freight rail network has struggled with locomotive shortages, cable theft and damaged infrastructure. Coal miners have lost export volumes as a result. Some companies have used trucks to move coal instead. But trucking costs more and cannot handle the same volumes as rail. The improvement in rail performance is therefore important. More trains mean more coal can get to the port. That gives miners a better chance of taking advantage of higher export prices.

Global energy prices have changed

The conflict involving Iran has added pressure to global energy markets. Gas prices have also risen. For some countries, that makes coal a cheaper option for keeping power stations supplied. South African coal producers can benefit from that demand because they already have mines and export routes in place. Exxaro expects its coal exports to increase by up to 12% in 2026. The company has pointed to better rail performance and stronger demand. But higher prices alone do not solve the industry’s problems. A miner still needs trains to move the coal. The port also needs to be able to handle it.

The rail improvement matters

For years, coal companies have talked about the same problem. They could produce more coal, but could not always get it to the coast. That is why the recent improvement in rail volumes is important. It gives producers more certainty when planning exports. It also reduces their reliance on road transport. If international prices are high at the same time, the financial benefit is much bigger. That is what companies such as Thungela are seeing now.

How long will it last?

There is no guarantee that coal prices will stay at current levels. The recent increase is closely linked to problems in global energy markets. If those pressures ease, gas prices could fall and some buyers may need less coal. South Africa is also still working to reduce its dependence on coal and add more renewable power. For the mining companies, however, the immediate picture is different. They have stronger prices and more coal moving towards export markets. Thungela is already considering further investment in coal mines while demand remains favourable. The industry now has a chance to make more from its export business. The challenge is doing that while the rail network is improving and coal prices are still on their side.