JOHANNESBURG (Reuters) - Major South African coal producers that own shares in the Richards Bay Coal Terminal (RBCT) may invest to expand the terminal to handle up to 100 million tonnes of coal a year, the head of Exxaro's coal unit said on Thursday.
Mxolisi Mgojo said coal miners had been surprised by the improved rate at which logistics group Transnet transported their coal via rail to the port in the second half of last year.
While Transnet's volumes are still below the terminal's annual capacity of 91 million tonnes, the transport group has been quickly catching up.
"The pressure is back on us as RBCT shareholders to say, beyond 91 million tonnes what can we do? We need to get to at least 100 million tonnes," he told a results presentation.
He said the expansion would depend on the timing of Transnet's upgrades on the coal export line.
For years miners had blamed Transnet for failing to improve much-needed infrastructure, but the group has put money into new wagons and locomotives and plans to build a line via Swaziland, which would ease congestion on the main coal export line and raise capacity to close to 100 million tonnes.
Exxaro, South Africa's second-largest coal producer and a big supplier to power utility Eskom, exported 4.9 million tonnes of coal last year and expects to ship 5 million in 2012.
Mgojo said there was more focus than ever on developing the Waterberg coal fields, seen as the next major coal hub as reserves in the Witbank area near depletion.
This is after the government highlighted the project as one of its economic priorities along with the need to secure coal supplies for South African power plants, now supplying 85 percent of the electricity powering Africa's biggest economy.
CAPITAL RAMP-UP
Exxaro also said it planned to more than double its capital expansion this year to 10.93 billion rand as it seeks to diversify into other commodities such as iron ore.
The miner, keen to eventually produce 10 million tonnes of the steel-making ingredient a year, made a bid worth up to A$338 million for African Iron, targeting the Australian-listed company's Mayoko iron ore project in the Republic of the Congo.
Exxaro plans to sell its mineral sands operations to U.S.-based pigment producer Tronox to create a $3.4 billion producer of the paint-making ingredient.
The miner also plans to establish a joint venture with an equity partner for its energy business and the deal should be signed within a week, said Ernst Venter, manager for growth.
Exxaro will decide this year what to do with its unprofitable Zincor refinery, which ceased operations in December. The site could either be sold or converted into other industrial uses, including a water treatment facility.
Exxaro reported a 40 percent rise in full-year headline earnings per share on Thursday to 20.98 rand, boosted by strong demand and higher prices and despite negative currency effects.
Headline earnings per share are the main profit gauge in South Africa and strip out certain one-time items.
The company said it would pay a final dividend of 500 cents.
The miner expects demand for most of its products to remain strong in 2012, although the rand and Australian dollar fluctuations are likely to impact its earnings.
Shares in the company, up 18.7 percent so far this year, were down 0.98 percent at 202.85 rand by 1234 GMT, compared with a 0.5 percent rise in the JSE Top-40 blue-chip index.
There are no comments yet