Africa’s Top Coal Port Expands To Open Up Export Capacity

Image (c) Richards Bay Coal Terminal

By Wendell Roelf

CAPE TOWN, Aug 28 (Reuters) – Africa’s biggest coal export port is be expanded in a $192 million investment designed to help smaller South African mining companies send their output abroad.

Shipping and logistics group Grindrod is forming a joint venture (JV) with investment group RBT Resources to expand its Navitrade terminal at Richards Bay, on South Africa’s east coast near the city of Durban, whose existing capacity is mostly used by major mining groups.

Under the plan, Grindrod’s Navitrade terminal, which has a capacity of 3 million tonnes a year, will be upgraded to handle 20 million tonnes as it aims to open up capacity for new entrants.

“The market focus of the JV is to service broad-based black economic empowerment mining companies, including junior miners, by providing them commodity export capacity … a facet of their businesses that is currently very challenging,” said Dave Rennie, chief executive of Grindrod’s Freight Services, in an emailed response.

Richards Bay Coal Terminal, the largest coal export facility on the continent, handles output from major established mining companies and would-be exporters have complained it is difficult to acquire slots from its owners, which include Anglo American , BHP Billiton , Exxaro and Glencore Xstrata.

The terminal, with a maximum design capacity of 91 million tonnes a year, is on track to top 70 million this year, up from 68.3 million in 2012, an official said on Tuesday.

Rennie said another key component of the JV would be to develop an inland coal hub allowing junior miners the chance to consolidate their volume in such a way that those with low volume production could also access export markets.

Grindrod will have a 49.9 percent stake in the JV and RBT will hold 50.1 percent.

Thabiso Buku, commercial director at RBT, told Reuters the cost to develop the fully mechanised coal export terminal would be in excess of 2 billion rand ($192 million).

“We expect to break ground in the first quarter of 2014 and ramp up to 20 million tonnes a year over the next three to five years on a phased basis,” Buku said.

($1 = 10.4127 South African rand) (Editing by David Holmes)

(c) 2013 Thomson Reuters