HomeEnergy MineralsCoAL and Transnet in Mooiplaats export agreement

CoAL and Transnet in Mooiplaats export agreement

An aerial shot
of Mooiplaats
Johannesburg, South Africa — MININGREVIEW.COM — 20 January 2009 – Emerging coal development and production company Coal of Africa Limited (CoAL) – listed on the AIM, the Australian Securities Exchange and the JSE – has struck a five-year agreement with Transnet Freight Rail (TFR) for the export of coal from its Mooiplaats mine in Mpumalanga through Richards Bay.

Fin24 reports that the negotiations were first announced in August 2008 as part of a scheme through which CoAL and other junior coal companies sought an alternative export route to the established Richards Bay Coal Terminal (RBCT).

The report adds that the coal will be railed as part of TFR’s general freight allocation on the Richards Bay line, and will be exported via the dry bulk terminal (DBT) in Richards Bay harbour. CoAL and the other juniors involved in the scheme will access the DBT from Grindrod’s adjacent Kusasa handling facility.

CoAL managing director Simon Farrell said in August: “We are going this route because it avoids a lot of the problems that the juniors are encountering trying to export through the RBCT.”

That approach now looks almost visionary, says Fin24, given the increasingly heated discussions between the RBCT and the newcomers waiting to join the terminal through the Phase Five expansion which is due to be commissioned in July.

Well-placed coal industry sources maintain that RBCT members are seriously considering shutting the Phase Five exporters out of the terminal until TFR is able to rail 76 million tonnes annually) to Richards Bay. It managed only 61.8mt during 2008.

The recent CoAL December quarterly report stated that TFR had allocated to the company the empty wagons returning to Richards Bay from ArcelorMittal’s Vanderbijlpark steel works.

This would allow CoAL to export at its initial planned rate of 900 000 tpa through Richards Bay.

Farrell said TFR had agreed to allocate further wagons to allow the total target of 3M tpa of coal to be handled through Richards Bay if plans to expand facilities at the Grindrod terminal went ahead.

He added that the coal washing plant at Mooiplaats was due to be commissioned in March. Production from the mine would start by the end of the first quarter of 2009, with the first coal sales to be made in the second quarter.