South African coal producers are looking at ways to overcome constraints on Transnet’s rail capacity to Richards Bay, which is expected to be well below the 91-million tons of export capacity coming on stream at the privately-owned Richards Bay Coal Terminal next year.

Coal of Africa said its Mooiplaats thermal coal project near Ermelo, which is on track to start mining in November, had signed agreements to export 900,000 tons of coal a year from next year through the Dry Bulk Terminal, operated by Grindrod, at Richards Bay.

Mooiplaats will ultimately be able to produce 3.4-million tons of coal a year. After expansions at the Dry Bulk Terminal, partly funded by Coal of Africa, it will be able to export 3-million tons of coal a year through the port.

The company said it held over $A240 million in cash and no debt, and would only spend $A40 million to bring its first project, Mooiplaats, into production. That would leave it with $A200 million to develop its other projects.

The company said it was talking to various international trading companies about selling this product and would start negotiations with Eskom next month about supplying nonexport quality coal to the nearby Camden Power Station.

At the Makhado Coking Coal project — previously Petmin’s Baobab project before being bought by Coal of Africa earlier this year — latest results suggested a mine could produce about 5-million tons of coking coal a year for 20 years. Coal of Africa has secured a long-term export allocation of 1-million tons a year through Maputo, starting next year.

The firm will also participate in the expansion of Maputo’s coal export facilities to bring its export capacity to 7-million tons and has signed an offtake agreement with an independent power producer for Makhado, which has put in a bid to supply Eskom with base load power.

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