Grindrod plan to expand coal terminals

Tuesday, 14 Jun 2011

Reuters reported that Shipping and logistics group Grindrod plans to expand its Mozambican and South African coal terminals to meet fast-growing demand for export capacity from miners.

South African coal miners have for years been unable to ship all their coal destined for exports due to an inadequate rail infrastructure and frequent derailments on the lines linking South African mines with ports.

Mr Alan Olivier CEO of Grindrod said any expansion would be subject to the availability of rail capacity linking mines in South Africa Witbank and Waterberg regions with ports. He said Grindrod had recently expanded capacity at the Matola coal terminal to between 6 and 7 million tonnes out of which 5 million will be for coal and 2 million for magnetite.

Mr Olivier said "The plan is to add up to an additional 20 million tonnes to that facility. He said that "Our intention would be to have that (expanded) facility up and running by late 2014."

Mr Olivier said the company was already in talks with potential users of that expansion, adding the interest was huge. He said that while the cost of processing coal at Matola terminal may not compare with much bigger facilities such as the Richards Bay Coal Terminal, the Matola facility would be competitive in terms of its shorter distance to the mines.

He added that further investment in rail capacity would be required to meet that expansion, although the capital needed for that was not enormous.

South African logistics group Transnet has been investing heavily to improve its rail infrastructure, but much more is needed to meet demand from miners eager to ship their product to India and China.

Transnet has been in talks with miners for them to help foot the bill to speed up investment in rail infrastructure, although the first such partnership has yet to materialise.

Mr Olivier said "There would be no shortage of private participation in that sector if there is a project that requires and justifies putting additional trains and rolling stock in place."

He said the company expansion of available coal capacity at its Richards Bay dry bulk terminal to 3.2 million tonnes from 1.5 million would be completed within months. He added that our next phase is to significantly grow that Richards Bay facility. We believe we can add 10 million tonnes or more to that facility."

Mr Olivier said the additional expansion could be completed within a year once rail capacity had been secured. He said the Matola and Richards Bay expansions would target junior miners, unable to get export capacity through RBCT.

Mr Olivier said Grindrod had no interest in the proposed Transkalahari line proposed by miners to link up coal mines in South Africa and Botswana with the port at Walvis Bay in Namibia.

He said that "The Transkalahari line is not practical. If you look at the geography, if you look at the costs, the logical outlet is to the east, not to the west." (sourced from Reuters)