Current and prospective South African coal exporters will be keeping a close eye on State-owned rail utility Spoornet, which will need to take decisive steps towards increasing its coal line capacity if it is to keep pace with the additional 19-million ton coal export capacity at Richards Bay coming on line in 2009.
The Richards Bay Coal Terminal (RBCT), the largest single coal terminal in the world, is expanding its current coal export capacity of 72-million tons a year to 91-million tons a year, in a R1,1-billion project, due for commissioning in September 2009.
Spoornet, which previously said that it planned on increasing its current rail capacity on the line from its current capacity of 78-million tons a year incrementally by three-million tons a year.
This meant that capacity on its coal line would reach 87-million tons a year by 2009 – nearly five-million tons a year shy of the RBCT expansion.
However, the rail utility had said that it required the necessary commitments from the coal mining industry before it could invest in upping its capacity.
Asked whether the rail utility, a Transnet subsidiary, would be able to rail 91-million tons a year by the time the expansion came on line, Spoornet spokesperson Molatwane Likhethe said “we anticipate matching rail capacity timely with coal export demand”.
“We will not flinch from our mission to delivery, and thus remain committed to sustaining the competitive advantage that the coal line provides to our customers,” he added.
Spoornet planned to spend R4,9-billion on the coal corridor, including locomotives, wagons and infrastructure, and had already ordered 110 electric locomotives for the coal line, which would be delivered next year.
New entrants adamant they will have enough coal to rail
All the firms contacted by Mining Weekly Online this week that had been allocated export capacity in RBCT’s phase five expansion, said that they would have enough coal to rail by September 2009.
These included Exxaro Resources, Arm Coal, and the South Dunes Coal Terminal, accounting for the majority of the expansion.
Thumelo Coal Mining, Mmakau Mining had not responded to requests for comment after Mining Weekly Online contacted them.
However, when all the other firms were asked if they would have enough coal to export by the time the expansion came on line, they all replied with a resounding “yes”.
And the companies that had not yet given Spoornet binding commitments said that they would be doing so soon.
Even the Department of Minerals and Energy (DME) had called on the rail company to have the capacity available for the new exporters.
“They said that they would proceed to put investment where they need to,” DME chief mineral economist Xavier Prevost said on May 10, the day that RBCT announced the allotments of the phase five expansion.
He said that Spoornet was waiting for assurances from the coal industry that expanded rail capacity would be taken up.
“Now they are going to see in black and white,” Prevost stated. “We will be waiting for them to reply.”
Asked if the DME would like Spoornet to meet RBCT’s 91-million tons a year capacity by 2009, he replied “of course”.
RBCT said that it had received 26 completed applications for the 19-million ton expansion, amounting to 26,85-million tons a year of export coal allocation.
RBCT chairperson Khuseni Dlamini also said that he hoped that Spoornet would be ready to rail 91-million tons a year by the time the expansion came on stream.
BHP Billiton, which had announced that it was selling nine-million tons a year of its 26,95-million tons a year current capacity, said that it would use all of the capacity that it was left with.
“It is our intention to use our existing capacity,” spokesperson for the diversified mining giant Bronwyn Wilkinson said in answer to emailed questions.