Webber Wentzel mining partner Manus Booysen
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – The participants of South Africa’s coal value chain needed to put an end to the misalignment of port over capacity and rail under capacity, Webber Wentzel mining partner Manus Booysen said on Monday.
Booysen, just back from a major McCloskey coal conference in New Delhi, called for coal value chain participants to meet urgently at the highest level to take full advantage of the colossal opportunity that was rapidly building up for the export of additional coal to an energy-hungry India.
Booysen told Mining Weekly Online in a video interview that the reward for South Africa of such collaboration between the government, Transnet and the coal mining industry would be significant job creation, a boost for black economic empowerment (BEE) and an injection of additional foreign exchange into the country.
“We need collaboration, cooperation and realistic understanding of the coal industry and the marketing opportunities, and we all need to work towards that common goal and to achieve that in the best possible way,” Booysen told Mining Weekly Online (see video attached).
He said India would soon be needing 950-million tons of coal a year to bring electricity to its vast population and it could only source 750-million tons of it locally.
The 200-million-ton shortfall gave South Africa an opportunity as it had become the preferred supplier of energy coal to the subcontinent for geographical and coal quality reasons.
In addition, many Indian companies were considering investment or had already invested in coal mining in South Africa, with an eye on rising Indian demand.
The only kink in South Africa’s armour was rail capacity, which, as prospective Indian investors had earlier pointed out from public forums, should not be an impediment in a modern economy.
Transnet, which recently attained the equivalent of what would amount to 72-million tons of coal exportation on a yearly basis, had the great advantage of supplying a port – the Richards Bay Coal Terminal (RBCT) – that already had considerable spare capacity in being able to export at a rate of 91-million tons a year.
Just closing that gap of nearly 20-million extra tons of coal a year would be a vital source of additional economic activity for South Africa, without the need for capital outlay, and there was a long-term opportunity to do much more, not only in South Africa, but also Southern Africa, taking in landlocked but coal-rich Botswana.
South Africa, Booysen believed, was in a better position to supply India than Indonesia, which had coal quality problems, and Australia, which was under production cost pressure.
But while South Africa had coal production capacity and port capacity, rail remained the limiting factor.
“We need to expand that,” Booysen urged, adding that it would give expression to the economic objective of the Mineral and Petroleum Resources Development Act to open up opportunities for historically disadvantaged South Africans to gain access to the exploitation of South Africa’s natural resources.
On the impediments in the way, Booysen told Mining Weekly Online that there was an unfortuante element of misalignment between the State-owned Transnet and the privately owned RBCT that needed to be eliminated.
“We understand that Transnet is now proposing to have a portion of the increased RBCT capacity as unallocated with the intention that the unallocated capacity will be made available to BEE players in the mining industry and emerging miners.
“We believe there could be greater cooperation between Transnet and RBCT and the various coal producers to achieve the economic opportunities and also promote BEE in the mining industry,” Booysen added to Mining Weekly Online.