Richards Bay Coal Terminal to Go Ahead with Expansion

BRISBANE, Australia - July 23, 2013 - PRLog -- South Africa’s Richards Bay Coal Terminal (RBCT) would not abandon a study assessing a sixth phase expansion to 110mtpa despite confirmation by Transnet last month that it was progressing plans of its own to build a terminal only kilometres away.

“Our board is discussing that [the expansion] and we will consider going to 110mpta. We will also consider partnerships with TFR [Transnet Freight Rail], or any other interested parties,” said Michael Solomon Teke, Chairman of RBCT.

“We have an opportunity to give the country something and I feel strongly that we would like to work with TFR,” he said in a telephone interview with the South African Coal Report (SACR). “The discussions are not dead yet.”

TFR, a division of state-owned transport and logistics company, Transnet, has been in discussions with RBCT, which is privately-owned, regarding providing additional entitlement to small-scale, black-owned coal exporters.

RBCT has been reluctant to relinquish export entitlement to exporters who have not contributed to the capital cost of expanding RBCT to its current capacity of about 92mtpa. A scheme called Quattro already provides 4mtpa of export entitlement through RBCT to small-scale miners, although the entitlement is often not used.

Mboniso Sigonyela, a spokesperson for Transnet, said the company was “open to exploring partnerships”.

“Transnet is open to exploring partnerships with like-minded organisations in pursuit of opportunities to create capacity ahead of demand,” it said in an e-mailed response to the SACR. “Such partnerships would be viewed in line with our mandate of enabling economic growth and ensuring capacity and access to export facilities for all operators,” it said.

Transnet said on June 27 that it hoped to have a plan on its own terminal ambitions by the middle of 2014. It was reported in 2012 that the terminal would have an opening capacity of 14mtpa with the ability to double its capacity.

Transnet has been critical of RBCT which is owned by some of South Africa’s largest coal producers including BHP Billiton Energy Coal South Africa and Anglo Thermal Coal, a division of Anglo American.

Said Brian Molefe, CEO of Transnet: “RBCT has got some elements of what typically goes wrong with concessions as smaller mines are complaining they can’t get access. We can either fight with RBCT or create some capacity at our own terminal. So we decided to create capacity on our own which is the role of the state”.

Said Teke, however: “I am extending a hand to Transnet to go the route of building 110mpta”.

Commenting on a criticism by Wescoal Holdings CEO, Andre Bojé, that Quattro wasn’t working because it didn’t allow coal exports below RB1 specifications, Teke said: “There is a reason for that. If the coal is below RB1 then it should be coal sold to Eskom. If we are going to declare coal a strategic asset, then that is the route to follow”.

Bojé told the SACR on June 25 that he had written to the Department of Mineral Resources in an effort to lower coal export specifications through Quattro. This would enable its members to make full use of their entitlement as they couldn’t make a profit producing the required higher quality export coal.

At 69.2mt, coal volumes along the Richards Bay line still represent record figures for TFR compared to the 61.9mt and 61.8mt transported down the rail route in its 2009 and 2010 financial years respectively.

For more news and analysis on the coal industry of southern Africa, subscribe to Energy Publishing’s South African Coal Report.  South African Coal Report provides the most comprehensive analysis along with price, trade and tender information on this important coal producing region.  Contact us at epi.coalinfo@ihs.com or visit http://www.coalportal.com for a free trial subscription or for more information.