London, England — 11 May 2012 – South African coal miner Strategic Natural Resources plc (SNR) will open a new coal export route using the East London port in the Eastern Cape when its joint venture marketing firm begins shipments in December.
Reuters reports that SNR has announced the formation of a joint venture company with Swiss-based trader Trasteel to sell SNR’s anthracite coal, according to the South African firm.
The joint venture, EliTra, will be owned in equal parts by Trasteel and SNR’s 74%-owned subsidiary Elitheni Coal Limited, and will sell the output of SNR’s Elitheni mine in the Eastern Cape, far from the coal heartland of Witbank and the privately-owned main export port of Richards Bay in Kwazulu Natal.
“This joint venture signals a strengthening of our relationship with Trasteel,” said SNR chief executive officer David Nel. “We believe that this new, higher margin anthracite focus will assist greater value creation for shareholders, while being developed alongside a thermal coal business,” he added.
Elitheni coal will be shipped from state-owned East London port in handy-max vessels commonly used to bring coal into Indian ports, because it cannot load bigger pana-max or cape-size ships.
EliTra “’ which has sold its first cargo of anthracite to a major Brazilian importer for delivery in December “’ will focus on the Brazilian and Indian markets, SNR said. The anthracite to be sold by EliTra will form part of the 2Mtpa of coal under the current Trasteel-SNR off-take agreement.
SNR said it can achieve a higher price for its anthracite than it would have by selling it as thermal coal under the current off-take deal with Trasteel. Because of this readjustment, the partners have agreed to reschedule coal shipments to the latter part of this year, instead of starting this summer.
An announcement last year that SNR was seeking off-take deals attracted interest from Indian importers in particular because so many traders and end-users had focused their attention almost exclusively on coal from Witbank and capacity at RBCT.
New international entrants have kept searching for both off-take and export space but aside from Vitol’s joint venture with Grindrod for the Maputo terminal in Mozambique few inroads have been made.
Source: Reuters. For more information, click here.