MIN­ING CA­PA­BIL­ITY

Finweek English Edition - - INSIGHT -

for its prodi­gious min­ing out­put, KwaZulu-Natal has strate­gic im­por­tance to the sec­tor if only be­cause its har­bours at Richards Bay and Dur­ban are sought after con­duits for coal ex­porters.

Ac­cord­ing to Transnet Freight Rail (TFR), Richards Bay and Dur­ban could support as much as 200 mil­lion tons per year (mtpa) in coal ex­ports in the long term. This com­pares to the 70mtpa ex­ported cur­rently – vol­umes that TFR may strug­gle to meet in its cur­rent fi­nan­cial year.

Ali Mo­tala, GM of TFR’s Water­berg coal business, be­lieves that cre­at­ing ex­port coal en­ti­tle­ment in KZN, es­pe­cially in Richards Bay, is cru­cial to the eco­nomic well-be­ing of the re­gion, in­clud­ing Botswana, which he be­lieves could sup­ply 60mtpa of ex­port-qual­ity coal from its share of the Water­berg coal­fields that ex­tend south­wards into the Lim­popo prov­ince.

Richards Bay Coal Ter­mi­nal (RBCT) is al­ready set­ting about pro­pos­als to ex­pand its ca­pac­ity from the cur­rent 91mtpa to 110mtpa, while TFR says it has not aban­doned plans for a 20mtpa ter­mi­nal at its own site in Richards Bay de­spite agree­ing to support the RBCT in its growth plans.

KZN’s pri­mary sup­ply of min­er­als and met­als is limited but it does have an­thracite, which is sold in in­ter­na­tional mar­kets as a sub­sti­tute prod­uct for the more ex­pen­sive cok­ing coal. Both an­thracite and cok­ing coal are burnt to fire smelters pro­duc­ing steel and is there­fore cru­cial to in­dus­trial growth, es­pe­cially in Asia.

The per­for­mance of com­pa­nies op­er­at­ing in KZN’s an­thracite fields has been spotty, how­ever, partly owing to the de­pressed state of the coal mar­kets at present.

Mi­randa Min­er­als and Buf­falo Coal Cor­po­ra­tion have failed to make a mas­sive suc­cess of their an­thracite mines, mostly sit­u­ated around the Dundee re­gion. Jo­han­nes­burg-listed Keaton En­ergy is break­ing even at its KZN col­liery, Vaalkrantz, which sup­plies Brazil with an­thracite, but the go­ing is tough with un­even ge­ol­ogy.

Pet­min, another JSE-listed firm, how­ever, has in its Somkhele col­liery in KZN, a ma­jor profit driver. The col­liery was re­cently ex­panded tak­ing pro­duc­tion to more than 1m tons an­nu­ally, which also in­cludes a ther­mal coal prod­uct.

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