Exxaro Sees Record Coal Export Prices Amid Middle East Tensions, Forecasts 8 Mt for 2026

When the U.S. launched a missile strike on Iranian targets in February 2026, the shockwaves reached far beyond the Middle East. In Johannesburg, Exxaro Resources Limited announced that its thermal‑coal export price had surged to $124 per tonne—a 35 % jump that set a new record for the industry.

The first half of Exxaro’s 2026 financial year, ending in June, saw export sales climb 15 % to 3.94 million tonnes. The company now projects total exports of 7.3 to 8 million tonnes for the year, up from 7.1 million tonnes in 2025.

The price lift is largely a consequence of the February strike, which prompted the Iranian government to block the Strait of Hormuz and shut down much of the Gulf’s LNG and oil traffic. With LNG shipments rerouted, buyers turned to coal as a substitute, driving prices higher. Exxaro noted that the API4 benchmark index, the industry’s export‑price gauge, reached a 31‑month high above $120 per tonne.

Indonesia’s recent shift to centralise coal sales through a newly created state‑owned company also helped support prices. The move reduced export volumes and aimed to stabilise the seaborne market. Exxaro’s chief financial officer, Riaan Koppeschaar, said the combination of Middle East disruption and Indonesian restraint created a “potential opportunity for alternative suppliers, including South Africa, to capture incremental market share.”

Logistics remain a bottleneck. Transnet, the state‑owned rail and port operator, improved its coal‑line performance to an annualised tempo of 60.79 million tonnes—a 7 % year‑on‑year gain. However, rail flow from Exxaro’s Grootegeluk mine still lags; only three to four trains per week ran during the period, compared with the contracted 11. The company is engaging with Transnet’s freight division to address the shortfall.

Domestic supply to Eskom, South Africa’s state utility, fell during the first half. Exxaro attributed the drop to an outage at the Matimba power‑station coal stacker, which reduced offtake at its Waterberg operations.

Capital expenditure on coal‑related assets rose to R1.46 billion in the first half of 2026, up from R866 million the previous year. The increase was largely for equipment replacement at its Belfast and Grootegeluk sites.

Looking ahead, Koppeschaar noted that rising diesel costs in Australia could constrain thermal‑coal supply, prompting importers to diversify. He added that the new Indonesian export model, combined with higher diesel prices, might keep coal prices elevated for the rest of the year, giving South African producers a window to increase market share.

In summary, Exxaro’s first‑half results show a robust rebound in coal export prices and volumes, driven by geopolitical disruptions and market‑supply adjustments. The company projects a solid full‑year performance, though logistics bottlenecks and domestic supply disruptions remain key risks. The broader coal market will continue to be shaped by Middle East tensions, Indonesian policy changes, and global energy demand shifts.