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Transnet sizes up R15bn coal export facility

Nompumelelo Magwaza

Transnet is exploring ways to build a new coal terminal at the port of Richards Bay at an estimated cost of R15 billion to allow emerging coal producers across South Africa to meet an expected rise in coal demand.

The proposed new facility would be situated a few kilometres from the Richards Bay Coal Terminal, which is one of the biggest in the world.

“South Africa has an abundance of key mineral resources including coal and heavy metals. Global demand for these resources is increasing dramatically and is forecast to continue growing over the coming years, driven largely by an increase in demand from India and China,” Transnet said yesterday.

The tabling of the plan comes after Transnet chief executive Brian Molefe said this week that exporters of dry bulk goods such as coal and iron ore could face tariff increases of 68 percent, while exporters of manufactured goods could see a tariff cut of about 49 percent.

Transnet said the building of the coal terminal would take place alongside an expansion of Richards Bay port that is scheduled to be completed in 2020.

The expansion programme would ensure that the port can accommodate growth in export demand up to approximately 50 million tons a year from 23 million tons.

“Demand patterns vary across commodities and key commodities are expected to peak in 2020 and then stabilise up until 2040,” Transnet said.

The expansion programme and the new coal terminal were estimated to cost between R25bn and R30bn combined.

The projects will get a slice of Transnet’s Market Demand Strategy, which has been allocated R300bn for capacity development over seven years.

Transnet’s director of the project, Sudesh Maharaj, said the expansion programme would help consolidate the break-bulk terminal and include the building of new berths. It would also expand the handling and offloading capacity of the terminals.

Although the coal infrastructure plan was still in its early stages, Maharaj was optimistic that it would be built for the purpose of unlocking capacity and not necessarily for demand from emerging coal miners. “The idea is capacity-led rather than demand-led. It would be ready for the use of those who are new in the coal market and they are expected to come from all over South Africa.”

Maharaj said the first phase would provide capacity for about 14 million tons of export coal a year, rising to about 32 million tons by 2040.

The first phase of the port expansion, which identified a number of conceptual design options for increasing general freight export capacity and a few options for the coal terminal, started in March last year.

The project is in its second stage, which entails evaluation of technical alternatives for the project design and technical pre-feasibility studies.

“During the current phase of the project, four of the most likely design options from phase one were identified and then simulated in a specially developed simulation model to gauge operational viability.”

Maharaj said the design that achieved the highest ranking in terms of viability would be selected as the preferred design to take into the next phase.

The project would be carried out with no disruption to current operations at the port.

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