Shabangu considers new coal allocations

Brendan Ryan | Wed, 30 Mar 2011 18:02

[miningmx.com] -- COAL exports by the current Quattro quota holders will continue unchanged while Mines Minister Susan Shabangu considers the new export allocations.

According to Quattro sources, the new allocations in terms of the four million tonnes per year export scheme were expected to be in force from Friday, April 1.

At the same time a process is being carried out to appoint a “permanent Quattro administrator”.

This will be done by the allocation committee of the coal industry task team (CITT) which oversees the Quattro scheme.

That step follows discontent among some Quattro members over the way in which the department of mineral resources (DMR) unilaterally removed former Quattro manager Mhlatuze Bay Coal Administrators (Mhlatuze) during February.

Mhlatuze was replaced by Ubu Logistics (Ubu) in which key shareholders include Alec Erwin – minister of public enterprises from 2004 to 2008 – and Portia Molefe, director general of public enterprises from 2005 to 2009 and former wife of Brian Molefe, who has just been appointed CEO of Transnet.

The feeling among some Quattro members was that – although the DMR chairs the CITT – it did not have the right to take this action and had unilaterally imposed Ubu on Quattro.

The DMR justified its action by claiming it was forced to act in response to extensive fraud it had recently exposed at Mhlatuze carried out by a former employee.

Mhlatuze replied the fraud - involving at least R5.5m - had been reported to members and stakeholders including the DMR in July last year.

The DMR is now describing the appointment of Ubu as an "interim measure".

The Quattro scheme was agreed to by the Richards Bay Coal Terminal (RBCT) to broaden use of the terminal by non-member, BEE coal producers following criticism that it was restricting access to the coal export markets.

In terms of the scheme 4mt/year of export capacity through the terminal is earmarked for use by BEE coal producers who are awarded the quotas by the AC.

The CITT is chaired by the DMR and comprises coal industry stakeholders such as Transnet Freight Rail (TFR), the RBCT, Transnet National Ports Authority (TNPA) and the BEE junior coal producers.

According to a source all the Quattro members attended the CITT meeting in Pretoria on Tuesday expecting to hear who had been granted what allocation in terms of the scheme with effect from April 1.

Instead, they were told that the recommended allocations were now with Shabangu awaiting her final approval.

DMR spokesperson Bheki Khumalo told Miningmx: "At the CITT meeting, the AC explained how applications for the Quattro allocation were evaluated and sought to ascertain if there were any objections to the process.

"As there was no objection, CITT members were informed that the AC’s recommendations for new allocation would be forwarded during the course of the week to the Minister for her consideration."

Asked when final approval would be granted Khumalo said "as soon as the Minister has had an opportunity to apply her mind on the recommendations".

Regarding Ubu’s position Khumalo said "CITT unanimously agreed that a confinement process be adopted and three service providers with proven track record in logistics be invited to submit their proposals on how they would administer the Quattro programme for the benefit of Quattro members.

"Further, CITT recommended that the task of adjudicating the service providers be handled by the AC of the CITT as this body was more likely to be fair and transparent since it compromised all the key stakeholders - the DMR, TFR, RBCT, TNPA and the BEE junior coal producers."