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2007 May 11   05:27

Richards Bay Coal Terminal may consider sixth phase expansion

Richards Bay Coal Terminal (RBCT) may consider a further expansion of its 91 million tonne/year facility after applications for additional export handling capacity was 42% over-subscribed.
The terminal, which has begun a R1.1bn, 19 million tonne/year expansion from 72 million tonnes/year, said a total of 27 million tonnes was applied for by 26 different companies. "This will give us food for thought," said Kuseni Dlamini, executive chairman of RBCT in an interview with Miningmx.
"We will digest this information and use it to consider further growth of our facility. As a company, we are committed to further growth if there is a sound business case for it," he said.
"ARM (African Rainbow Minerals) would certainly be interested in acquiring more coal entitlement, and aggressively so," said Pieter Rorich, a spokesman for the empowerment company. "It's possible further coal entitlement could be procured from other players."
ARM and Exxaro Resources, another empowerment grouping, carried away a quarter of new coal export handling capacity in terms of RBCT's expansion.
Including its new allocation, Exxaro Resources can now export 5.7 million tonnes/year of coal through RBCT, the world's largest coal export terminal.
"We now have a significant coal export business, one which will grow hand-in-hand with Exxaro's strategy to become a major coal player," said Con Fauconnier, Exxaro CEO in a statement.
Of the 19 million tonnes on offer, nine million tonnes was made available with specific emphasis to empowerment firms (ARM, 3.2 million tonnes; Exxaro 2.5 million tonnes). A further six million tonnes was awarded to the South Dunes Coal Terminal (SDCT), and four million tonnes to so-called Quattro users, "... a new generation of coal exporters", said RBCT in an announcement.
On completion of its expansion - its fourth since it was founded about 30 years ago - RBCT will have export capacity of 91 million tonnes/year. Volumes of internationally-traded thermal coal had risen from 515 million tonnes in 2005 to 551 million tonnes in 2006.
However, Dlamini said the pressure was on transport utility, Spoornet, to provide enough infrastructure to keep the terminal growing. "We're convinced the coal is out there," said Dlamini. "But further expansions are predicated on Spoornet."
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In the past, there has been speculation that demand for the right to export coal would fall below the capacity installed by the expansion.
Gerard McCloskey, chairman of UK coal consultancy, the McCloskey Group, said in January booming demand from Eskom may take up most of the expected production increases from the South African coal sector and limit the volume of coal available to be exported.
He also raised questions over whether South Africa had sufficient reserves of export quality coal to sustain that volume of exports.
It was also considered likely that some of South Africa's largest coal producers, such as BHP Billiton's coal division or Anglo Coal, may consider selling some of their entitlement as certain operations downscale.

    
   

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