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Exxaro predicts rise in coal prices

Coal being railed
into the Richards
Bay coal terminal
Johannesburg, South Africa — MININGREVIEW.COM — 27 November 2009 – South African diversified miner Exxaro Resources Limited expects coal prices to rise to between US$70 and US$75 per tonne in 2010 from around US$65 per tonne this year, due to rising global demand.

Making this prediction here, Exxaro executive general manager for business growth Ernst Venter said this represented an increase of between 7.5 and 15 %. He added that coal demand had started to rise on the world market, with India becoming a major market, particularly for steam coal.” “The recession is over and demand is now rising, and as a result prices will also rise," Venter told Reuters.

Venter revealed that 95% of Exxaro’s coal was still going to Europe, and added that the company’s plans to export up to 7.5 million tonnes in 2009 would be hampered by logistical problems and a lack of bigger port capacity at the Richards Bay Coal Terminal (RBCT).

“Europe is still a good market in terms of our coal, and we have plans for the future, especially the Indian market,” Venter said. “We could have exported about 7.2 to 7.5 million tonnes this year, but we will only get to about 5 million,” he added.

Reuters reports that RBCT had predicted that it would expand its capacity to 91 million tonnes by October, but logistics group Transnet said it had signed contracts with coal producers to rail only up to 70 million tonnes of coal to the port this year.

Exxaro has said that it would consider using private haulers if Transnet failed to bring all its coal to the port. Venter said the RBCT could export up to 67 million tonnes of coal this year, and raise exports to about 74 million tonnes in 2010.