CAPE TOWN (miningweekly.com) - South Africa needed a second coal export terminal in order to ensure access to more coal-miners, Transnet Freight Rail (TFR) CEO Siyabonga Gama said on Thursday.

Gama told McCloskey's South African Coal Exports Conference in Cape Town that the current one-terminal paradigm presented access issues.

"The different players need to be able to participate," Gama said in direct reply to a question put by chairperson Gerard McCloskey.

"We need to think clearly about access and the institution needed to drive coal exports. Miners needed to be assured access, which should not just be for a few individuals," Gama replied.

Gama had said earlier that South African coal production needed to be geared towards greater rail utilisation.

He said that control of the global supply chains would be essential for South African coal exports to achieve full potential and the coal production needed to be geared towards higher rail asset utilisation.

In expanding to 91-million tons a year and beyond, TFR had to plan its expansions in an integrated manner, along with port and shipping capacity.

"We must avoid the risk of lazy capital," he said, adding that rail was the most investment-intensive part of the supply chain.

Coal terminal ownership had to be considered and access to the port had to be accelerated for black economic-empowerment participants.

The industry was not keeping up with TFR's increased tempo of 1,4-million tons a week.

"I do not claim that Transnet is blameless, but it is important for all of us to take an end-to-end view, with tight communications, rather than communication through the press," Gama chided.

Capital expansion plans were on tack and the 110 new locomotives would begin to arrive this year.

TFR was committed to tariffs that made the industry sustainable and the industry had been invited to contribute its expertise to optimise end-to-end streamlining.

"We are serious about both growth and sustainability," Gama assured.

Coal was not the only business that TFR ran and it had a commitment to other commodity transporters and needed complementary strategies.

"If we integrate our efforts across the entire chain, we will do better as we enter a new era of growth in South Africa," Gama said.

Global thermal coal had experienced unprecedented demand between 2002 and 2007 and had grown to 700-million tons and would continue to grow from 2,5% to 3% a year.

South Africa was fortunate to have coal reserves in Witbank and Waterberg of more than ten-million tons and South Africa's neighbours were well positioned.

There was a sea of revenue potential for the coal industry and the potential to create an abundance of jobs.

The target was to create rail capacity of 91-million tons a year and the potential for greater than 91-million tons a year was possible.

Transnet had planned to spend R10-billion to grow its coal business.

But a win-win economic situation had to be established.

Freight rail was enormously capital intensive, and high asset utilisation was needed to make freight rail profitable.

Accepting phantom demand was the wrong approach and TFR was committed to change that.

Military precision was needed to ensure that TFR's assets were used in a beneficial way.

The key to creating new rail capacity was confirmed long-term contracts.

Transnet had agreed to provide a team to iron-out problems collaboratively.

Industry had been invited to discuss the optimal investment formula.

In the ten weeks beginning in December, the coal tempo had been 4,6-million tons a week, which equated to 76-million tons based on a 52 week year, contrast to the 62-million tons until November 2008.

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