Growing SA’s ability to export coal has become increasingly important as international coal prices have soared this year and the government has identified the sector as offering opportunities for new black empowerment companies. SA is the biggest supplier of coal to European power plants.

RBCT is the world’s biggest single coal export terminal. Although the port of Newcastle in Australia ships more coal, it comprises two terminals.

The expansion, announced two years ago, will increase RBCT’s export capacity to 91-million tons of coal a year from 72-million tons previously. By January this year, capacity had been increased to 76-million tons.

Bloomberg recently quoted McCloskey Group data showing the price of coal exported from RBCT had risen 55% to $149,15 a ton in the first half of this year.

Although the railway network to RBCT is state-owned, the terminal itself was built and is owned by the private sector. Its shareholders are Anglo American, Eyesizwe Coal, BHP Billiton Energy Coal SA, Kangra Coal, Sasol Mining, Total Coal SA, Xstrata, South Dunes Coal Terminal Company, Main Street 432 (part of Siyanda Resources), Exxaro and Quattro. Quattro is an export allocation shared by small users.

But doubts are being expressed in various quarters about how much the port will actually export once the expansion is complete. Last year RBCT exported 66,1-million tons of coal, well below its existing capacity.

In the six months to June, 29,1-million tons were shipped, an annualised 58,4-million tons. In the same period last year RBCT had shipped 31,4-million tons or an annualised 64,09-million tons.

The terminal attributed last year’s shortfall partly to port closures because of bad weather. Asked about this year’s shortfall, Luthuli says apart from machine breakdowns suffered at the beginning of the year, there were no significant operational factors affecting exports from RBCT.

“All factors affecting exports are external to RBCT as we are exporting more tonnage than we receive, as evidenced by our low closing stocks in most of the month, beginning with low stocks in January 2008.”

Mining companies have openly complained about the unreliability of the rail service to the port, while Transnet Freight Rail has countered that the mines are not always using the full rail capacity because of production shortfalls.

Sasol, which exports about 4-million tons of coal a year, said recently that poor rail services “resulted in below-budget export sales through the Richards Bay Coal Terminal” for the year to June. Anglo Coal said in its June interim results that export sales had dropped 5% “as the shipping schedule was negatively impacted by below target performance from Transnet Freight Rail, as well as the lower production”.

Although RBCT should be ready to export 91-million tons early next year, Transnet Freight Rail only plans to increase capacity on the line to 81-million tons up to 2011-12, at a cost of R9,4bn, from 74-million now.

Transnet CE Maria Ramos said at the group’s recent June results presentation that expanding capacity beyond that level was a “work in progress” with the coal exporters. She said Transnet needed to be assured the volumes were actually available and agree on “take or pay” clauses.

Those South African companies that are able to get their product through the port are reaping the benefits. Anglo Coal SA’s operating profit more than doubled in the six months to June as export prices were 52% higher than the previous period, more than offsetting lower domestic and export sales volumes, it said. Production was affected by power supply issues and higher rainfall.

Petmin reported in March its after-tax profit had risen 145%, partly on export prices but also because it was ramping up production at Somkhele and its Springlake Colliery was turning around. Both of those operations export anthracite, and management said they would benefit from improved export prices in the first half of this year.

Other smaller companies, including South African Coal Mining Holdings, Coal of Africa, Miranda Mineral Holdings, HCI Kusela Coal and Keaton Energy, are busy developing new coal mines to take advantage of the buoyant export market.

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