Mozambique is well placed to compete with South African coal in the Middle East and North African (MENA) markets, according to S&P Global Platts, but port capacity and infrastructure challenges are an obstacle to growth.
Platts reports growing interest in Mozambican coal from buyers in the MENA region thanks to its freight rate advantage. Freight from Maputo is US$1 per metric tonne cheaper than Richards Bay.
Richards Bay however has greater terminal capacity than Maputo which can handle vessels no greater than Panamax size.
“Those capacity issues limit the port’s attractiveness to buyers,” a Northwest Europe-based broker of Mozambican coal told Platts. “This means that buyers with a conservative approach to procuring southern African coal will default to the Richards Bay Coal Terminal as it is a more trusted and established location.”
Additionally, Platts noted that when Maputo prices were around the same level as Richards Bay, Mozambique coal was less favourable as the high ash and low moisture of the coal created more dust than South African coal.
