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Tuesday, February 7, 2012

Mozambique's Maputo hot spot for South African coal

Tuesday, 07 Feb 2012

Mozambique capital Maputo is hotting up as a magnet for companies aspiring to be significant South African coal exporters, following a Vitol joint venture deal.

Industry sources said that the port has been used on a small scale for coal exports which shippers were unable to move from the main export hub, Richards Bay Coal Terminal but is now the centre of major expansion plans for South African coal.

A recent visitor to the port said that two exporters have in the last few months started using the main Maputo harbour, which has no loading equipment, for the first time and gleaming new fencing has been set up around stockpiles there.

A handful of mining majors own RBCT, by far the cheapest, most efficient port, but new entrants have mostly failed to gain a foothold there.

An executive involved in South African projects said that "If you want to be producing South African coal for export, don't ever think you are going to get into Richards Bay Maputo is really the only option.”

Would be entrants already see Glencore well established. At Maputo it accounts for a third of the 3 million tonnes a year of exports and is also using the main harbour which has no loading equipment.

This deadlock has been frustrating for rival, large trading firms wanting to catch up with Glencore's roughly 20 year head start in building an integrated global coal business including investments in mines and ports and myriad offtake agreements.

(Sourced from Thomson Reuters)

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