South Africa plans new coal export terminal

A new South African thermal coal export terminal will be built this year at South Dunes near Richards Bay that could start shipments as early as June, South African industry sources said.

Two junior coal mining companies have been pushing for the new terminal to be built by the National Ports Authority to enable more small Black Economic Empowerment miners to export their own coal.

The new terminal will start at a rate of around 1.2 million tonnes per year but this could rise significantly, the sources said.

If South African state rail operator Transnet Freight Rail cannot provide a rail line or trains to move coal to the new terminal, British rail freight company Freightliner is willing to partner with Transnet to do so, the South African sources and Indian coal buyers approached by Freightliner said.

"The terminal is going to be built. The National Ports Authority will make an announcement this month," said one source who declined to be identified.

International coal traders who have been seeking additional South African coal export capacity could take stakes in the new terminal and have shown interest, the source said. However, exporters and traders shipping from Richards Bay Coal Terminal, the country's dominant port with a capacity of more than 70 million tonnes a year, said they were extremely sceptical that any terminal would be built at South Dunes.

"It''s a good story but it won't ever happen," one exporter source said.

An Indian coal end-user approached by Freightliner dismissed the proposed South Dunes plan on grounds of cost. "I've seen the presentation and Freightliner's costs are double that of Transnet to Richards Bay, it's just too expensive," he said.

The potential for private-state rail partnership does exist in South Africa and would be a swift and simple way to enable more coal to move to Richards Bay but the costs must be competitive and a framework needs to be developed to encompass private partnerships, sources said.

 

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