May 17, 2008

RBCT confident about expansion despite coal supply crunch

Mining Weekly reported that state owned power utility Eskom's coal crunch would not affect or delay a potential phase six expansion of the world's biggest single coal terminal to bigger than 100 million tonnes a year.

Mr Kuseni Dlamini chairperson of Richards Bay Coal Terminal said that the terminal company had completed a study late last year which showed that there was a business case for expansion beyond the 91 million tonnes a year by 2009.

When asked on what Eskom's coal shortage would have on the possible expansion. Mr Dlamini said that "I do not foresee any impact.” He explained that export coal and the fuel that the power utility burned in its power stations were of different grades. Mr Dlamini said that however, what could impact on the phase six expansion was another parastatal, rail monopoly Transnet Freight Rail's, ability to boost its coal carrying capacity to the port.

Transnet Freight Rail said in January that it would support industry expansion, but only if it had assurances that the coal miners would have enough coal to take up any expanded rail capacity.

The coal terminal's management had not yet decided on the quantum of the potential expansion, but Mr Dlamini said that it was certainly likely to be bigger than an increase to 100 million tonnes a year.

When asked about the possible timing of any further expansion Mr Dlamini stressed that "We cannot expand in isolation. What we've said is that we will take the decision on the ability of Transnet." But he said that he was confident that there was enough coal in South Africa to meet both domestic and export demand.