Karen Harverson reports on the details of Sasol’s plan to enter the coal export market
Sasol’s mining division this week released details of its R635-million plan to enter the coal export market through the expansion of capacity at its Twistdraai Colliery and its recent acquisition of a shareholding in the Richards Bay Coal Terminal (RBCT).
The coal export project, announced last year, was delayed until the company could tie in a harbour terminal to handle its coal. In June this year, Sasol signed an agreement to buy 5,2 percent of Shell’s shareholding in the RBCT.
Shell, along with coal producers Ingwe, Amcoal, Gold Fields, Total Exploration, the Kangra Group, JCI and Duiker Exploration are the shareholders in the RBCT.
The RBCT is the largest coal terminal in the world and one of the most efficient. It has a design capacity of 60-million tons a year and expects to handle between 56-million and 58-million tons of coal this year.
Without a share in the terminal, Sasol has effectively been excluded from exporting.
In 1991, along with other coal producers such as Anglovaal and Iscor, Sasol investigated the possibility of setting up a new terminal next to the RBCT but dropped the idea last year. The potential project, known as Coalex or South Dunes, has since been abandoned by the other players.
Besides the purchase of its RBCT shareholding, Sasol’s multi-million-rand plan also includes the expansion of capacity at its Twistdraai Colliery and the construction of a beneficiation plant.
Twistdraai contributes 4,5-million tons of coal a year to Sasol’s total coal production of 41-million tons, all of which is consumed by its synfuels plants. By expanding Twistdraai’s production to 8,5-million tons an additional three million tons of high-quality coal will be available for export. About one million tons will be discarded as waste.
The expansion of Twistdraai is due for commissioning at the end of 1996 and an initial one million tons of coal will be exported in 1997. This will increase to three million by 1999.
Twistdraai, 520 kilometres from Richards Bay, is adjacent to Sasol’s Secunda coal deposits — the largest underground coal mining complex in the world, with a lifespan of more than 65 years.
Besides export markets, coal division general manager Johan de Vos says Sasol will also look to supply the domestic market.
“We have vast reserves which we plan to exploit if the markets are available,” says De Vos. He says possible supply contracts could emerge from the Majuba project as well as from the potential demothballing of power
“The export project will create 400 new jobs, earn R370-million in foreign exchange and contribute about R130-million to the gross geographic product of the Eastern Transvaal,” he says.
Of the 185-million tons of coal produced in South Africa, Amcoal produces about 24 percent, Ingwe (an amalgamation of Rand Coal and Trans Natal) produces 37 percent, Sasol produces 22 percent and the rest is supplied by small producers such as Iscor, Goldfields, Duiker, JCI and others.