Richards Bay losing its ‘sole coal gateway’ status

Questions continue to be raised about whether the deep-sea bulk port of Richards Bay will remain the sole gateway for SA coal exports, with the landside logistics an exceedingly weak link in the supply chain. The limited rail capacity has continued to affect the Richards Bay Coal Terminal (RBCT) coal export capabilities, reports ICAP Shipping. May shipments from RB, for example, were 3.6million tonnes, 1.2mt below April’s volumes and 1mt lower than in May 2010. The cause of these reduced exports was maintenance work on the main rail line into the port, which was closed for 20 days until June 11 – and these maintenance closures and temporary shutdowns (because of floods or labour problems or train derailments) have become a frequent occurrence. For years the annual capacity at RB has far exceeded that of the Transnet Freight Rail (TFR) system. Despite RBCT’s nameplate capacity of 91 mt, exports have never surpassed 2005’s 75-mt – even with Asian demand since 2008 having led to big export boosts for other coal producers like Australia and Indonesia. RBCT expects its 2011 volumes to be in line with the 63.4 mt exported last year, as rail bottlenecks continued, CEO Raymond Chirwa said. But Divyesh Kalan, the GM of Transnet’s coal division, insisted that Transnet still expected to rail 70million tons of export coal to port in the 2011/12 financial year. TFR aims to increase its coal line rail capacity to 81 million tons and Kalan said that it was on track to achieve that capacity by 2015. But in the meantime, the coal mining companies have been pushing hard for greater volume on the line to the coal terminal at RB to cash in on high prices for export-grade thermal and metallurgical coal for steel making. Prices have surged on strong demand from countries such as China and India. TFR is considering a plan that is intended to take some weight off the coal line. This is a new general freight rail line that will run from Ermelo in Mpumalanga into Swaziland towards Mbabane and then to the industrial area of Matata – Swaziland’s second city – before ending in RB. A memorandum of understanding has been signed with Swaziland to investigate the economic feasibility of such a development, TFR CEO Siyabonga Gama said. “We want to see if we can explore a link through Swaziland to Richards Bay so we can use that channel to take out non-coal cargo, which would vastly improve capacity,” he added. As much as 15 mt of general freight transported on the coal line annually could be moved to the new line, according to Gama. An update on a study being conducted with Swaziland will be ready by October. Stephenson Ngubane, the director of operations and marketing at Swaziland Railway, said the new line was still in the concept phase. He said it would be an entirely new line and could link up with a new iron-ore mine being planned on the border between Swaziland and SA. The line would also be used to transport other minerals from Swaziland to RB. Another study – a multibillion railway line between the coal-rich Waterberg region and Ogies in Mpumalanga – was also being explored, Gama said. But probably the most significant alternative to RB at the moment is the Matola Coal Terminal (MTC) in Mozambique’s capital and port city of Maputo. And there is already a rapidly growing amount of SA coal successfully being shipped out of Matola, according to Dave Rennie, director of the Grindrod Group, owner of the terminal. He also highlighted a good performance by TFR on the rail run from the Mpumalanga coalfields to Matola. “TFR have come to the game,” he told FTW. “The turnaround time from the coalfields to Matola was 200 hours at the end of last year, and this has come down to 90 hours now – with TFR having increased the capacity by two and a half times. “And they are getting the turnaround down to 70 hours by further increasing the capacity.”