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Fight is on to expand Richards Bay port
![Image:](https://biz-file.com/c/1402/175130.jpg)
This became clear from presentations at the IHS McCloskey South African Coal Exports Conference in Cape Town on Thursday [30 January 2014]. Transnet is also considering building its own terminal at Richards Bay‚ but GM Divyesh Kalan said not all the proposed projects could go ahead because they would create huge overcapacity.
"We will have to make a business decision on which terminal to invest in‚" Kalan said.
The key issue is that Transnet's "business decision" may be made on factors other than an assessment of the cost of building the terminal and the subsequent operating costs for the users.
On that basis‚ the RBCT must be the hands-down winner. It has the key infrastructure - shipping berths and rail access - in place‚ which will greatly reduce the capital cost‚ while its railage costs and handling charges are well below those of its competitors.
But from Transnet's perspective the overriding issue is providing access to the export market as soon as possible for emerging black miners. That is the proposition being pitched by RBTGrindrod CEO Bongani Biyela.
Biyela said RBTGrindrod "understands junior miners because that's our background‚ we are a black-led company that will focus on emerging miners".
The RBCT pitch was laid out by chairman Mike Teke last week‚ who said the proposed 19-million-tons (mt) a year Phase 6 expansion of the terminal was an opportunity to accommodate other key players such as Transnet.
RBCT GM Jabu Mdaki told the conference that if Transnet teamed up with the RBCT and paid for the Phase 6 expansion‚ then it would able to allocate the extra 19mt/year as it wished to black emerging miners.
But the problem is when the emerging miners would be able to access that capacity‚ given that Transnet's planning only calls for it to deliver 81mt/year to the RBCT by 2018. It is not clear when it will get to 91mt/year‚ the terminal's current capacity‚ let alone 110mt/year.
It is understood that existing RBCT shareholders will not consider allocating more capacity to emerging miners until Transnet is able to rail 91mt to the terminal.
Kalan alluded to this‚ saying: "The current shareholders who invested in 91mt (of capacity) will perhaps only start sharing once rail gets to 91mt. That's still far away and the demand we face right now from emerging miners is for export capacity today."
That is because the existing RBCT shareholders have already "taken a haircut" in agreeing to reduce their export levels to bring in the black companies exporting in terms of the Phase 5 expansion of the terminal from 72mt/year to 91mt/year. The RBCT exported 70.2mt in 2013 and forecasts 75mt for this year.
The other issue is Transnet management's apparent strategic desire for a second major terminal to break the stranglehold that it considers the RBCT holds on the coal export trade.
Asked about this‚ Kalan said: "I think there are many other factors than just commercial discussions. It would be useful to have an alternative terminal‚ whether it's a Transnet terminal or another alternative terminal in order to stimulate competition. We will make a commercial decision on that‚ and will also make a decision based on what Transnet's influence is on a channel. We do not want to be dictated to."
Source: I-Net Bridge
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