Coal terminal plan terminated
Transnet cancels plans to build a R15-billion third coal terminal at Port of Richards Bay.
THE public dispute between Transnet and mining resources giant BHP Billiton last year concerning coal export capacity for small black-owned mines at the Richards Bay Coal Terminal (RBCT), has been resolved with a new agreement.
Billiton shook hands with Transnet on a deal to increase capacity for junior coal miners by four million metric tons, while the state-owned transport and logistics group scratched off its plans to build a third coal terminal in Richards Bay.
This means double the coal export capacity for Quattro, the black economic empowerment (BEE) scheme to benefit smaller players in the industry, and no more extra competition for RBCT and the RBT Grindrod Terminal.
On cancelling the proposed terminal, Transnet Group CEO Brian Molefe last week said it was ‘not as urgent as before’ since ‘Transnet made up with BHP Billiton’.
Last year Molefe criticized RBCT and its major shareholders BHP Billiton, Anglo American, Xtrata and Exxaro for denying access to the export market to small coal mining companies.
In response, Billiton said the accusation was ‘far from the truth’ and slated Transnet Freight Rail’s underperformance in matching its capacity to rail coal to RBCT.
Since then, however, RBCT CEO Nosipho Siwisa-Damasane said the company have successfully engaged with TFR on both efficiency improvements and the ramp-up plans for the coal line for the export of coal.
‘Transnet and RBCT will continue to discuss enhancements to ensure efficient delivery of coal exports through the Port of Richards Bay,’ said Siwisa-Damasane.
XMP Consulting Senior Coal Analyst Xavier Prevost said it would not have made any commercial sense for the utility to build another terminal, since RBCT is operating below capacity owing to low global coal prices.
The agreement
Transnet will sign take-or-pay contracts with all the mining companies with which the group commits to providing trains, while the customer will be obliged to pay whether it has products to rail or not.
Billiton has already signed a 10-year take-or-pay agreement worth R24-billion.
Transnet said it is confident that contracts will be signed by the remaining 28 customers by the end of this month.
