[miningmx.com] – RICHARDS Bay Coal Terminal (RBCT) had no immediate plans to approve a sixth phase expansion of its 91 million tonne/year facilities despite waging a bitter war with Transnet which threatened to build its own terminal.
The two sides fought in 2012 when Brian Molefe, Transnet CEO, threatened to build a terminal next door to RBCT’s facilities after shareholders of the terminal, principally BHP Billiton Energy Coal (Becsa), declined to hand over more of its entitlement to black-owned, small-scale producers.
The stand-off nearly resulted in an exchange of blows, according to Molefe, and pushed Becsa into a rare public comment in which it defended its empowerment credentials. In the end, Becsa agreed to relinquish more of its entitlement to BEE as part of a new R24bn take-or-pay agreement with Transnet.
Nosipho Siwisa-Damasane, CEO of RBCT, said in a site visit to RBCT today that an expansion of RBCT in a sixth phase 19mtpa expansion to 110mtpa had not yet gone through a bankable feasibility study. She added that were the expansion approved, it would take five years to execute, adding: “I would not be surprised to see it happen.”
Transnet has long argued that it would be cheaper to expand its existing terminal facilities since it had already sunk capital into the terminal whereas Transnet’s terminal plans comprised a capital-intensive greenfields development.
However, Siwisa-Damasane said that while the terminal could readily expand its facilities, there were no immediate plans to do so, adding that Richards Bay as a port had significant coal export options.
“Transnet National Ports Authority has capacity plans of 140mtpa of coal at Richards Bay as a port. We can only expand to 110mtpa which allows for another 30mtpa,” said Siwisa-Damasane.
There was also no clarity on whether Transnet had progressed its new offtake agreements with RBCT shareholders.
In September, Transnet said it had sealed a R24bn take-or-pay agreement with Becsa and that other deals with its other 28 coal exporting customers would follow.
Asked if these deals had been signed, as promised, Transnet chief operating officer, Mlamuli Buthelezi, said the agreements were unsigned, but imminent.
SHIPPING TARGETS
Siwisa-Damasane said the pressured state of the coal industry would not impact the terminal’s target to lift coal shipments to 74mt, a 4% increase year-on-year.
“We are looking at over 74mt this year for 2015,” said Siwisa-Damasane. “We won’t be affected by the price environment,” she added. RBCT shipped 71.2mt in 2014 after adjusting for power interruptions in February.
On a three-year basis, shipments are expected to increase from 74mt in 2015 to 77mt and 81mt in 2016 and 2017 respectively.
RBCT is owned by South Africa’s coal export companies with the Glencore comprising the largest shareholder with a 32% share followed by BHP Billiton Energy Coal South Africa (Becsa) and Anglo American.
Some 67% of total shipments were to Asia last year of which half was to India. Siwisa-Damasane said she expected this trend to continue. “There is alot of talk about China but India remains a big market,” she said.
European buying accounted for a quarter of RBCT shipments in 2014 with the balance made of Africa and the rest of the world.
“We expect similar sales picture in 2015,” said Siwisa-Damasane. RBCT stopped issuing monthly shipment and delivery figures in October last year saying that it was not in line with best practice internationally.
