Rail inefficiencies hit SA’s coal export volumes

Exports for the year will
most likely reflect a loss
because of the impending
three-week closure of
the coal line to Richards
Bay from Mpumalanga,
according to Optimum Coal,
one of the country’s largest
coal mining firms.
“We will carry on
production during the
closure of the line but will
most likely end up stockpiling,”
said a company
spokesman.
“No doubt, though, the
closure will affect us.”
Transnet Freight Rail
announced earlier this
month that the fully
electrified 580-kilometre
coal line, which starts in
Mpumalanga and runs
through KwaZulu Natal
to Richards Bay, would be
shut from May 23 to
June 11 as part of its
planned maintenance.
Optimum Coal supplies
coal that is used to power
5% of the electricity on
Eskom’s African grid.
“We will continue with
production and expect to
make a loss in that time but
it would be unfair to provide
estimates, given that our
financial year ends in June,”
said the spokesman.
The Richards Bay Coal
Terminal is the largest coal
port in Africa with the
capacity to ship 91-million
tonnes out of the country
each year. However, it
currently handles about
65 million tonnes to the
terminal.
TFR is set to benefit over
the next five years from
the company’s R110-billion
upgrade to rail and ports
around the country.
But the closure for
maintenance of the coal line
to Richards Bay is likely
to see a drop in coal
exports, which increased
to 5.3 million tonnes last
month from 4.57 million
tonnes in February,
according to Simon Lester,
the managing director of
Clarksons in South Africa.
He said coal exports from
the RBCT would decrease
to around 4-4.5 million
tonnes.
Meanwhile Bheki Sibiya,
the chief executive of the
Chamber of Mines, said
recently that coal exports
from South Africa had
fallen from 71.4 million tons
in 2005 to some 63 million
tons in 2010, mostly due
to the inefficiencies in the
Coalink railway line.
He said in this context
of falling coal exports,
South African coal exports
to Europe had declined
sharply and export volumes
of export-quality coals had
shifted to the Far Eastern
markets, including India.
The percentage of South
African coal exports that
go to Europe has decreased
from 90% of total to some
50% over the past two years.
Some 50% of South Africa’s
export coals are now
destined for India and other
Far East markets.