Thungela's rocky road

The coal miner’s listing on the JSE was disappointing but expected.

- David McKay

Thermal coal producer Thungela Resources’ debut on the JSE this month was a disappointing affair. To some extent, this was predictable given that a portion of its UK register is – or was – tracker funds. These are Anglo-American shareholders that were handed Thungela shares as a function of Anglo’s coal asset demerger. Since they normally are not mandated to hold coal shares, the only outcome was selling.

At a debut valuation of $250m, the share traded well below the $440m to $950m valuation imputed to it by Liberum Capital, a UK bank. At the time of writing, the share was recovering from its shaky start, but time will tell the full story.

That may only be towards the end of the year. Investors in Thungela have been promised a handsome dividend yield. Should it fail to deliver, the share may face greater sanction than any carbon discount attached to it.