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SA could export 20% more coal

Coal railed into
the Richards Bay
Cape Town, South Africa — MININGREVIEW.COM — 28 January 2010 – South Africa could export close to 20% more coal this year following logistics group Transnet’s investment in upgrades on the Richards Bay rail line, but it will still be far from the port’s projected capacity.

Transnet’s rail division expects to transport 65 million tonnes of export coal to the port this year, and will try to raise that to 70 million tonnes, while the Richards Bay coal terminal has estimated exports of up to 72 million tonnes of coal in 2010.

Transnet said it was trying to raise its railing capacity to 81 million tonnes in the medium term, but would only be able to get to 91 million tonnes, to match the export terminal’s expanded capacity, in the long term.

Reuters reports that South Africa’s coal exports declined to 61 million tonnes last year, largely due to constraints on the rail line, but Transnet said it expects recent upgrades to pay off, and to enable it to deliver more coal.

“For 2010 we’ve forecast 65 million tonnes. It’s not what the industry is looking for, but based on the information we have, and based on the operating efficiencies we have … that’s our best shot,”, Transnet coal business general manager Divyesh Kalan told the McCloskey coal exports conference in Cape Town.

“We also have an aspiration to move and overrun the 68 to70 million tonne mark.” Coal producers are also hopeful exports will pick up.

“I’ve heard a variety of numbers being mentioned, all of them around the 67 to 68 million tonne mark,” said Anglo American Plc South African coal unit head Norman Mbazima. He added that there was no doubt that the Richards Bay coal terminal (RBCT), currently completing an expansion to raise capacity to 91 million tonnes, would be able to handle this volume, but constraints on the rail line were a concern.

“What we are talking about are teething problems. I’ll be more worried about whether we will be able to get the 91 million tonnes of coal to Richards Bay, than argue about whether Richards Bay can handle it,” he said.

RBCT chief executive Raymond Chirwa said that while Transnet was eyeing a ramp-up to 91 million tonnes, RBCT has done initial studies to expand the terminal beyond that to be able to handle up to 110 million tonnes to match rising demand.

He added that the terminal expected its Phase V expansion, which will raise its capacity to 91 million tonnes from 76 million, to be completed within two months.

Chirwa said Asia could easily overtake Europe as its main export destination, with India taking 17.7 million tonnes of South Africa’s coal last year already.