[miningmx.com] — THERE’S still no word on which black economic empowerment (BEE) coal miners have received export quotas through the revised Quattro scheme, six weeks after it was referred to Minister of Mineral Resources Susan Shabangu for final approval.
In terms of the Quattro scheme 4 million tonnes (mt) of export capacity at the Richards Bay Coal Terminal (RBCT) has been reserved for exclusive use by BEE coal companies.
It’s understood Quattro exports are continuing as per the previous quota allocations. However, Miningmx has been unable to establish precisely what is happening despite repeated requests by phone, SMS and email to department of mineral resources (DMR) spokesperson Bheki Khumalo.
The scheme continues to be run by “interim manager’ Ubu Logistics, but a spokesperson for Ubu referred Miningmx back to the DMR, saying Ubu had already provided the information requested by Miningmx to the DMR.
Ubu – a company in which key shareholders include former minister of public enterprises Alec Erwin and former director-general of public enterprises Portia Molefe – was unilaterally appointed manager of the scheme in February by the DMR.
The DMR justified its action, claiming it had just discovered extensive fraud at former scheme manager Mhlatuze Bay Coal Administrators (Mhlatuze).
That claim was rejected by Mhlatuze, which pointed out the fraud – involving about R5.5m – had been reported to stakeholders – including the DMR – in July last year.
The unilateral appointment of Ubu upset some Quattro members, and the DMR on March 30 announced this was an “interim measure’ and it was now carrying out a process to appoint a “permanent Quattro administrator’.
Again, Miningmx has been unable to get an update from the DMR on what progress has been made towards appointing the permanent administrator and who the candidates are.
In the meantime, the coal trading sector is full of speculation over what is happening with RBCT exports.
Sources tell Miningmx that Transnet Freight Rail (TFR), which operates the Witbank to Richards Bay coal line, has adopted a policy of giving priority on railage to BEE exporters.
Those are defined as Quattro members plus the members of the Phase Five expansion of the RBCT.
But TFR’s new approach has stoked up the simmering controversy over which exporter should be allocated what share of available railage capacity, given that TFR is unable to deliver all the coal the RBCT members want to export.
TFR’s new approach inevitably means that more favourable treatment of BEE coal exporters must further reduce the railage capacity being made available to the other members.
TFR spokesperson Mboniso Sigonyela would not give a definitive answer when approached. However, he said: “Transnet is committed to providing capacity to emerging miners, in particular BEE players.’
Uncertainty over when a coal exporter can expect coal to reach Richards Bay has a knock-on effect in terms of the subsequent arrangements that have to be made to get the coal loaded and shipped out of the port.
Erratic rail delivery translates into uncertainty over shipping arrangements, which in turn can negatively affect actual coal export volumes. Latest RBCT export statistics appear to indicate that that is what is happening.
Industry sources say Quattro scheme members are getting more coal delivered to the RBCT than expected, with the result that the scheme’s allocated stockpile space is full because the coal is not being shipped out fast enough.
That has another knock-on effect because coal left on a stockpile for too long can start burning through spontaneous combustion. The danger of spontaneous combustion is higher with Quattro coal, where the stockpile is made up of product blended from a number of different producers.
Latest RBCT export figures show that terminal is running way below forecast throughput for 2011 on an annualised basis.
The stated target for exports during calendar 2011 at the beginning of the year was 70mt. According to Exxaro Resources, that was revised by TFR in February to 68mt, following the impact of derailments on the line.
But RBCT statistics show a cumulative amount of just 19.1mt of coal was exported by the end of April. That’s equivalent to an annualised 57.3mt, which compares with total actual exports of 63.4mt during 2010.
The Richards Bay line is about to be closed for maintenance from May 23 to June 11, during which time the RBCT will have to rely on stocks to maintain export levels.
The terminal had stocks on hand of 3.6mt at the end of April – equivalent to about three weeks of exports at current levels.
The bottom line is that unless there is a dramatic recovery in the tempo of exports in the second half of the year, the RBCT could be on track for yet another poor performance with annual exports falling back to levels seen more than a decade ago.
