Media releases

14 December 2009

Richards Bay Coal Terminal expansion will catapult emerging coal exporters to the global stage

• Technical commissioning will result in 81 million tons terminal capacity by end of the month
• Rail constraints identified and bottlenecks to be unclogged
• Worldwide Coal Carolina, Mmakau, Arm Coal, Tumelo and South Dunes Coal Terminal agreements are in the final stages of concluding agreements with RBCT
• RBCT will be 30% black-owned when the terminal reaches a capacity of 91 million tons

Phase V on track for technical commissioning

Richards Bay Coal Terminal’s R1.2 billion Phase V expansion will be rolled out from April next year on an existing terminal control computer system.

Once completed, the increased capacity is expected to earn South Africa more than R6 billion in foreign exchange revenues. The terminal will increase throughput capacity from 76-million tons a year to 91-million tons a year, consolidating Richards Bay’s position as the single largest export coal terminal in the world.

Raymond Chirwa, Chief Executive of RBCT, says: “RBCT has embarked on technically commissioning Phase V on an upgraded and existing computer system, at the latest, by the end of the first quarter of 2010.”

This means the terminal capacity will be 81 million-tons by the end of this month, progressing towards 91 million-tons during the first quarter next year.

“The Phase V project has delivered on everything except for the new Terminal Control System with which we have had challenges. We are working on systems integration, which admittedly is taking time,” Chirwa says.

Transformation of South Africa’s coal export industry

As promised in 2006, RBCT is even more committed to opening up global markets to black players in South Africa’s coal export industry. 9 million-tons per annum of expansion capacity has been offered to other shareholders, 9 new players and commercial users with black economic empowerment priority.

Mbokondo, Umcebo, Exxaro and South African Coal Mining Holdings (SACMH) have concluded agreements with RBCT and are ready to rail coal; while Worldwide Coal Carolina, Mmakau, Arm Coal, Tumelo and South Dunes Coal Terminal agreements are in the final stages.

“It is my belief that the remaining agreements will be concluded before the end of December 2009 so that all new exporters will join the existing shareholders in exporting coal as early as January 2010. I commend the existing RBCT shareholders for walking the talk. They have curtailed their export capacity to the new entrants, a bold, magnanimous and commendable step that accentuates their commitment to the transformation agenda and the success of a workable venture,” says Chirwa.

All new, approved Phase V users will be accommodated within the current terminal capacity until critical business challenges are met. By the end of this year the new entrants would have concluded their contracts in order to start exporting early next year.

“In 2004, less than 1% of RBCT was black-owned. This will rise to more than 30% when the terminal reaches a capacity of 91-million tons. Transformation remains one of my key priorities at the helm of this organisation and I’m delighted with developments to date,” Chirwa says.

Rail capacity mismatch and the way forward

The RBCT Phase V expansion programme has not progressed as expected due to Transnet Freight Rail’s (TFR) non-performance in meeting our rail capacity requirements.

“This bottleneck has delayed the integration of black players into the system and has threatened our competitiveness, a situation we cannot permit. More than 80% of our coal exports land in Europe and the Indian sub-continent. Government, existing shareholders and ourselves are keen to ensure entrants share in these lucrative markets and become a part of the South African coal story,” says Chirwa.

For its part, TFR has admitted it has not delivered on its mandate. It is now engaging with industry and drawing in additional technical resources in order to ramp up capacity.

“We do realise that growing our coal exports requires a collaborative effort. RBCT and its shareholders are appreciative of TFR’s genuine efforts to finding a solution to the problem of limited throughput capacity while also fast-tracking the social agenda,” Chirwa says.

Of key importance is clearing up bottlenecks and improving scheduling and efficiencies.

Chirwa concludes: “Coal is one of South Africa’s strategic selling points. At RBCT we are committed to maintaining this position and playing our part in meeting customer demand in all of our markets.”

Issued by: Richards Bay Coal Terminal

ZamaLuthuli

Corporate Affairs Manager

Prepared by: Ravin Maharaj, FD Media & Investor Relations

+27 83 447 5158 / ravin.maharaj@fd.com