HomeEnergy MineralsTransnet declares 'force majeure' on companies using coal terminal

Transnet declares ‘force majeure’ on companies using coal terminal

A coal train on
the Richards Bay
Johannesburg, South Africa — MININGREVIEW.COM — 19 May 2010 – State-owned rail, ports and pipeline operator Transnet Limited. has declared “force majeure” on the coal companies using the export coal line between Witbank and the Richards Bay Coal Terminal (RBCT) at Richards Bay.

According to specialist coal industry publication McCloskey’s Coal Report (MCR), Transnet started contacting the various coal exporters yesterday after the breakdown of attempts to resolve the dispute with its unions through mediation.

This was confirmed this morning to Miningmx by a Transnet spokesman, who said the terms of the contracts between Transnet and the coal companies provided for the declaration of force majeure in the event of a strike. The action had been taken despite the signing this morning of a draft agreement that may see the end of the two-week strike.

According to United Transport and Allied Trade Union secretary-general Chris de Vos there was “a good possibility” that the draft agreement with Transnet could be made official tomorrow afternoon.

Miningmx reports that the Richards Bay line has so far been unaffected by the strike because it coincided with a period of planned maintenance on the line which has been shut down for a ten- day period ending tomorrow.

Despite the declaration of force majeure the impact on actual coal shipments out of Richards Bay is likely to be minimal unless the strike continues for another two weeks. This is because the RBCT built up stock levels ahead of the planned shutdown of the line, and export shipments are currently running at low levels in response to reduced market demand.

According to MCR quoting a coal industry source, the terminal still had around 4.8Mt of coal on its stockpiles as of May 13. This means RBCT can keep going for another two, maybe three weeks running down those stockpiles, although there would be problems with the availability of certain grades of coal towards the end of that period.”