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to: Russell @ (Repeats the previous story for a wider readership without a change of text.) The opinions expressed here are those of the author, a Reuters editorialist.)
CAPE TOWN, Feb. 4 (Reuters) – Climate change may be ironic due to an increase in weather delays that resulted in a 4% drop in South Africa's coal exports last year, but in reality the rough seas at the Richards Bay terminal are the least of the industry's concerns.
Shipments from Richards Bay increased from 76.5 million tonnes in 2018 to 73.5 million tonnes in 2018, well below the 91 million tonnes capacity of the terminal, which is the second largest in the world. behind the port of Newcastle in Australia.
The terminal lost 36 days of loading last year due to adverse weather conditions, down slightly from 38 days in 2017, both of which were significantly higher than in previous years.
But even if the terminal was fully available every 365 days of the year, it is still unlikely that much more coal has been shipped.
Richards Bay Coal Terminal (RBCT) chief Alan Waller blamed the decline in South African exports at market conditions, as high prices dampened demand in the main destination for Indian exports.
Nosipho Siwisa-Damasane, chairman of the RBCT, said weather disruptions would also be a challenge for the coming years, and that terminals around the world would have to deal with the "new standard" of previously abnormal meteorological conditions.
While high prices have undoubtedly contributed to the decline in exports, it is also likely that infrastructure constraints and the inability of many South African coal miners to increase their production may have a negative impact. greater importance.
The rail network can theoretically convey 81 million tons per year of South African continental mines to RBCT, which means that even though it was running at full capacity, there would not be enough coal to use the capacity of the RBCT. export of RBCT.
Mandisa Mondi, General Manager of Coal Freight Transportation at Transnet National Railroad, said last week at the IHS Markit Southern African Coal Conference in Cape Town that plans were in place to increase rail capacity to align it on that of RBCT.
These include the initial steps to improve technology and operational efficiency to reduce bottlenecks, followed by subsequent improvements in infrastructure, such as a new one. tunnel crossing a mountain between the inland coalfields and the coast.
Transnet said that it could eventually increase the available rail capacity for exports by 25 million tonnes from current levels, but this will depend on the miners' commitment to produce and export more.
It is here that the situation becomes less clear, companies having hesitated in recent years to invest in the construction of new mines or even in the extension of existing activities.
This is partly due to a long-standing dispute over South African mining laws, although this appears to have been resolved recently.
Confidence is missing?
Nevertheless, coal miners in South Africa should have a positive view of likely demand before committing capital to new projects.
The IHS Markit conference heard some promising forecasts of coal demand, mainly due to the ramp-up of new power plants under construction in India.
However, these forecasts should prove hopelessly optimistic, especially as renewable energy becomes cheaper and more reliable, and more and more liquefied natural gas (LNG) is available through projects in Australia, the United States and the United States. United and Russia.
Just under half of South Africa's coal went to India in 2018, a country with a formal policy of zeroing coal imports.
South Korea, which is also planning to reduce its coal consumption, and Pakistan, concerned about the foreign exchange cost of importing fuels, are also among the major buyers.
While South African coal is considered a good quality product and superior to the supplies of Indonesia's largest thermal coal exporter, there are serious questions about whether demand in Asia will be sufficient to justify spending the hundreds Millions of dollars needed to boost mine supply and rail capacity.
It is therefore likely that South Africa will continue to be a relatively stable supplier of about 75 million tonnes of coal per year for the marine market.
This could increase somewhat if Transnet could eliminate bottlenecks and RBCT did not lose more days due to harsh weather conditions.
But for now, any ambitious plan to boost coal exports is exactly what's needed.
(Edited by Christian Schmollinger)
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