Spoornet deals Richards Bay coal expansion dreams a blow

rail utility spoornet would not have sufficient capacity on the rail line to the richards bay coal terminal (rbct) by 2009 to meet the port’s expanded export capacity, spoornet senior manager of business development on the coal line mac van der merwe confirmed yesterday.

sa’s coal sector has been identified by the minerals and energy department as an important growth area for introducing new black empowerment operators and creating jobs because of the relatively low level of capital required to start a coal mine compared with other mining.

the shareholders of rbct, who include anglo coal, bhp billiton energy coal sa and xstrata, announced last year they had committed r1,1bn to expand the port’s capacity by 19-million tons to 91-million tons of coal a year by 2009.

of the expanded capacity, 4-million tons would be set aside for emerging exporters and 9-million tons would be made available by tender to applicants showing empowerment, proven mining capacity, a bankable feasibility study and an undertaking that spoornet could provide rail capacity.

van der merwe said the capacity on the export rail line was 78-million tons of coal a year, for which spoornet had contracts with coal export companies.

there were no contracts in place for more than that, he said. “at this point we have decided not to increase the capacity on the rbct line above 78-million metric tons until we have concluded contracts with the coal export parties,” he said.

once the decision had been made, spoornet would be able to increase capacity on the rail line by 3-million tons a year, he said.

that meant if it started upgrading the line this year, by 2009 it would still have only 84-million tons of export capacity.

van der merwe said the reason spoornet could not expand capacity faster than 3-million tons a year was that it had also committed to expanding capacity on the sishen-saldanha iron ore line, which was a complex operation.

orders for locomotives had to be placed overseas because local workshops were already at full stretch, he said.

he was answering questions at the competition tribunal hearing into the proposed acquisition of wakefield colliery for r425m from metorex and umnotho we sizwe investments by black empowerment coal company shanduka resources. the deal was announced last july.

concerns have been raised that the transaction could be anti-competitive and the list of witnesses called includes not only representatives of spoornet and rbct but also power utility eskom and cement maker ppc, which is a large consumer of coal.

the hearing was adjourned to an unspecified date because of the late submission of documents by various parties to the tribunal and commission, as well as issues over sections in the documents that could be confidential.

questioning at the hearing centred on whether the capacity on the rail line and the port was being fully utilised.

earlier, rbct executive chairman kuseni dlamini said there was a continuing conversation in the local industry on what sa’s sustainable level of coal exports could be, but there was no reliable information.

the response to rbct’s tender offer of 9-million tons of coal exports a year, which should be adjudicated by june, was showing there was enough demand for the extra capacity, he said.