EXECUTIVE SUMMARY:
Thungela was formed when the South African thermal coal operations demerged from the parent company and listed on the JSE and LSE in June 2021. As a result of the demerger, Thungela had to set up its own treasury department. Financial Director Deon Smith approached TreasuryONE, South Africa’s largest managed treasury services provider, to assist with the set-up of a treasury department that runs on world-class treasury technology.
CLIENT PROFILE:
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- Company: Thungela
- Headquarters: South Africa
- Founded: 2021
- Industry: Producer and exporter of high-quality, low-cost thermal coal
- TreasuryONE Services Selected: FX Dealing & Risk Management
CHALLENGES
Thungela produces an annual 15.0 Mt of high-quality export thermal coal destined for export markets generating foreign exchange exposure. TreasuryONE’s highly skilled market risk team navigates the risk areas of foreign exchange, interest rate, and commodities and achieves competitive execution rates in a fast-moving and complex marketplace.
SOLUTION
The TreasuryONE Dealing Desk works with the Thungela finance team to time the execution of the agreed strategy based on expert analysis of market conditions and outlook. This is to optimise the average performance and avoid buying at the market highs and selling at the lows.
RESULTS
The team has designed an effective hedging strategy for Thungela based on Thungela’s treasury policy and specific business requirements. The strategy, combined with our expert knowledge of the technical and fundamental features of the foreign exchange market, takes care of all the hassle of foreign exchange transaction confirmation, settlement, regulatory compliance and reporting.