OPENING up export markets to emerging, black-owned thermal coal miners has been close to the heart of the South African government for many years, so it’s disappointing to see data issued by Richards Bay Coal Terminal (RBCT) in January showing exports from black companies has been dwindling.
According to RBCT, the industry-owned facility that loads coal from trains delivered by Transnet to ships en route to India, Europe and South East Asia, exports through Quattro, the terminal’s black economic empowerment scheme, fell to 1.8 million tonnes (Mt) compared to 2.2Mt in 2015. Quattro’s capacity is, however, much larger at 4Mt a year.
One assumption was that poor coal prices had not incentivised deliveries but that doesn’t explain poor volumes through Quattro in November when RBCT exported at an annualised 91Mt versus exports for the calendar year of 72Mt amid a spike in internationally traded coal prices.
Speaking at the Mining Indaba conference in February, Johann Bester, project manager for independent power producers at Thebe Investment Corporation and formerly acting divisional executive for Eskom’s primary energy division, said black-owned mines were funneling exports through traders instead.
“We see that exports have increased and even some of the majors are preferring to buy from some of the smaller players because the export market is relatively agnostic in terms of where the coal is coming from provided the coal’s specification is being met,” he said.
“Even though the Quattro allocation is 4Mt a year, apparently only 1.8Mt of that was utilised in the form of Quattro allocation, but I hear that the coal is still moving from the emerging miners, but it’s just moving through other channels,” he said.
A senior coal industry source, who asked to remain anonymous, told Miningmx that Trafigura, a Singaporean trader, had aggressively moved in to the market hoovering up coal from black companies instead of directly through Quattro.
“We don’t comment on our commercial strategies,” said Victoria Dix, head of media relations at Trafigura’s Swiss-based headquarters.
While it’s no crime for black-owned mining companies to opportunistically seek out lucrative business transactions, it does put their Quattro entitlement at risk if it is not being utilised. The scheme’s administrator, UBU Logistics, regularly reallocates entitlement on behalf of the Department of Mineral Resources.
UBU has Alec Erwin, the former trade and industry minister and Portia Molefe, the former director-general of the Public Enterprises Department among its directors.
