‘Realistic’ export target set by coal terminal
Richards Bay Coal Terminal puts this year ’ s likely export volume at 50Mt much lower than what Transnet is promising to deliver
● Richards Bay Coal Terminal (RBCT), which ships coal from South Africa’s largest producers, including Thungela Resources, Exxaro and Sasol, has set a “realistic” export target after 2023’s volumes fell to the lowest level in 31 years.
RBCT said on Thursday it is set to export 50Mt this year, even though Transnet Freight Rail (TFR) has separately forecast it will deliver 60Mt to the terminal.
Coal exports through the terminal fell to 47.2Mt in 2023, the lowest since 1992’s figure of 48.6Mt, because of difficulties at TFR, which last year delivered about 3Mt less coal than the 50.43Mt it managed in 2022. RBCT, whose design capacity is 91Mt, recorded its best performance in 2017 when 76.47Mt were shipped.
TFR is struggling with a range of issues, including an impasse with the Chinese manufacturer over spare parts for locomotives, low network reliability and cable theft.
Transnet has previously said cable theft is at crisis levels, with 1,500km of cable stolen in financial 2022 and 1,000km in financial 2023 in more than 3,500 theft “events”.
RBCT CEO Alan Waller said on Thursday that the terminal has taken a conservative view on what is possible, given the troubles at TFR.
“I think we understand better some of the challenges that are facing us, and that you are not going to turn the ship around on a tickey; it is going to take us a while to get there. The 50Mt [target] I would like to believe is conservative, certainly in terms of the uptick that we have seen.”
Referring to TFR’s expectation that it would deliver 60Mt, Waller said: “It is not an expansionary environment, it is a recovery environment. I think that is the difference, we understand there is a recovery, but it is not necessarily as quick as we think it could be and there are a number of unknowns still in this process.”
One of those was the status of some 300 locomotives that are out of commission due to a lack of parts from China. “There is uncertainty still in terms of exactly how the stranded or parked locomotives will come on board and what that is going to mean.”
Waller said the 50Mt target “could change significantly” once there was more certainty on “big ticket items”.
RBCT chair Nosipho Damasane told the same media briefing that the terminal and TFR had jointly ordered compressors and batteries, which are among the parts needed for the locomotives. But these might only be delivered in April.
“We understand that although our joint partnership is assisting in shortening the procurement time, there is still the realistic factor that these parts we ordered will be manufactured and will take time,” she said.
Two trains collided and came off the tracks of the main coal export line two weeks ago, and Damasane said this was apparently caused with signalling system failures due to cable theft.
“If you look at the signalling, which we were told caused the previous accident, the reality is the assessment and resignalling is going to take its own time. So we cannot in one year expect to have a drastic move in terms of a turnaround of these volumes, so we sat as a board and decided that ‘let us be conservative in the way we apply our minds’,” she said.
Acting TFR CEO Russell Baajites told the briefing there had been a drop in security incidents in recent weeks. “That has helped improve the performance.” He said Transnet was taking steps to reduce its reliance on copper cable.
Brendon Hubbard, portfolio manager at ClucasGray, said the government had to implement its declared policy of allowing greater private sector involvement in the rail system. “We could probably add 70,000 jobs to the 90,000-odd people working in the coal mining industry; we could almost double tax collection from coal.”
But Transnet was collapsing, he said, with some industry insiders giving the state-owned enterprise another four years before it grinds to a total halt due to lack of cash and maintenance.
“Three government bodies — the department of public enterprises, the department of transport and the National Treasury — accuse each other of the collapse at Transnet and failure to implement cabinet’s approved policy of rail reform,” Hubbard said.
“The blame game gets played by senior government officials while the corruption at Transnet continues; these corrupt officials are finding every available excuse to stop the private sector from running [the railway] while miners receive section 189 notices and the South African Revenue Service can’t collect enough tax to bail out Transnet.”
As part of the government’s plans to revitalise the railway system, a national logistics crisis committee, a joint initiative between business and the government, was established in June last year.