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Richards Bay Coal Terminal: FAQ

Phase V frequently asked questions

What is the purpose of Phase V?

  • To increase the terminal’s throughput capacity to 91 Mt/a.
  • To effect transformation of the terminal by meeting economically sustainable export demand of all SA export coal producers, with an emphasis being placed on BEE exporters.
  • To enable BEE emerging coal exporters to expand their global footprint.
What are the benefits of this expansion for the existing shareholders?
  • The shareholders recognise that they operate an export terminal to service the coal industry. To that extent, existing shareholders recognise the benefits of supporting transformation of the South African coal industry.
  • To the extent that available capacity is undersubscribed, existing shareholders may also receive additional capacity.
  • Existing shareholders share in the benefits generated by the increase of throughput, the effect of which is a lower operating unit cost per ton.
  • The RBCT cost structure is currently 85% fixed and not expected to change materially post the expansion

How much of the extra 19 Mt/a will go to BEE parties?

  • The 4 Mt/a Quattro project is earmarked for Black Emerging Miners.
  • 6 Mt/a will be allocated to South Dunes Coal Terminal (SDCT), which represents a number of BEE exporters in a single company.
  • The remaining 9 Mt/a has now been allocated to successful applicants (with the emphasis on BEE exporters firstly).

What conditions are attached to the 9 Mt/a for tender?

  • Proof of mining capacity
  • Demonstrated Transnet Freight Rail capacity support
  • Applications will be subject to the right to audit
  • Applications will include an unconditional offer to acquire the full tonnage applied for
  • In the event of over subscription, a ranking process will be applied

Can the same party obtain tonnage under three different modes of access?

  • No, access needs to be in one of the three modes.
  • The exception to the above is that a current user of Quattro who is in good standing and for some reason is not able to access shareholding or long term take or pay volumes.

RBCT shareholders and their current annual allocations at 72 million tons capacity in 2007?

  • Ingwe Collieries Ltd 26.96 Mt
  • Anglo Operations Ltd 19.78 Mt
  • Xstrata South Africa (Pty) Ltd 15.05 Mt
  • Total Coal South Africa (Pty) Ltd 4.09 Mt
  • Sasol Mining (Pty) Ltd 3.60 Mt
  • Kangra Coal (Pty) Ltd 1.65 Mt
  • Eyesizwe Coal (Pty) Ltd 0.87 Mt

How do the new allocations differ from the “Quattro” allocation in Phase V?

Quattro (4 Mt/a) allocations are for emerging BEE exporters, typically with annual export volumes below 250 000 tonnes per annum. These volumes are made available on a commercial basis and are not available in the form of shareholding.
9 Mt/a is available (through tender) to larger exporters in excess of the 250 000 tonnes per annum, including those exporters who would like to own shareholding or have entitlement for an extended period of time, ideally 10 years at a commercial rate.

How will the RBCT loan be recovered?

The RBCT loan will be recovered through the cost of shareholding and the commercial rate attached to long term take or pay volumes.

Will the expansion costs increase the Free on Board (FOB) cost to customers?

The expansion cost per ton is broadly in line with prior expansions. The FOB costs will be determined by individual shippers based on their own arrangements, but there is no reason for the expansion to materially increase or reduce the average loading costs of the industry.
The actual operating cost per ton would be expected to reduce based on the increased volumes

What will the usage charge be for new participants?

The usage charge for new participants has not yet been determined, however, the current common user charge is R25.16 per ton and the commercial rate per ton charged to new participants would be calculated on a similar basis, being the cost associated with providing the facility at a reasonable rate of return on capital. The charge for new participants would differ from the common user charge due to reduced risks associated with long term take or pay agreements.

What will new participants pay for shares in RBCT?

Based on the current estimates of the project cost and the funding costs, the anticipated share price would be based on an approximate cost of between R89.00 and R100.00 per ton.
It should be noted that if the scope is varied to possibly cater for incremental volumes in excess of the proposed 91 Mt/a, this cost could increase marginally.
In addition to the purchase price paid for shareholding, shareholders will pay an annual operating cost per ton.

Will these new shareholders have the same rights as the existing shareholders?


How will an extra 19 Mt/a from SA affect the world coal market?

RBCT is not in a position to comment on market prices and the global demand for coal.

Does SA have reserves/resources to feed this expansion? For how long?

This is a matter for mining companies and RBCT does not have access to this information. However, RBCT can confirm it has received significant interest in expansion tonnages and notes that the current Quattro allocation was oversubscribed.

Will the expansion project add new jobs to the market?

While there will be no significant long term changes in RBCT’s employment numbers, the expansion project itself will generate jobs and it could bring about the development of new mining operations.
The construction of the terminal expansion will certainly add to the local economy, but RBCT cannot comment on exactly how many jobs are likely to be created until the work is further advanced.

When will the capacity be available?

Capacity would become available in July 2009.

Duration and cost of the project?

The construction period is approximately 31 months at an expected cost of R1.1bn.

What portion of the project is local supply and what is imported?

85% is local content.

What portion of the Project will be provided/supplied by BEE companies?

The BEE target for the expansion is 20 % of the direct field cost.

Who will be appointed as the Principle/Managing Contractor?

Bateman Africa Limited.

Are there portions of the work that will be available on open tender?


How many contractors will be employed on site at any one time?

At the peak of construction it is expected that approximately 300 contractors will be on site and during the entire construction period, approximately 500 contractors would have been “engaged”.

How is the capacity being made available?

  • Existing shareholders 72 Mt
  • SDCT 6 Mt
  • Allocated to successful applicants 9 Mt
  • Emerging BEE exporters 4 Mt

How much throughput capacity will be available on completion of Phase V?

91 million tons per annum.

Once allocation is obtained and throughput capacity is available, how is coal exported through the terminal?

Refer to the Layman’s Guide to Exporting Coal for more details on the practical matters regarding the export of coal through RBCT.

How is the capacity made available?

RBCT will implement the Phase V expansion project and Project Quattro. The Phase V and Project Quattro scope of the work include:

  • Additions and modifications to the rail network in the Arrivals Yard,
  • Fulls Yard, Tippler Yard, Empties Yard and Departures Yard;
  • A 120 ton Locomotive;
  • A rotary tandem tippler (Tandem Tippler 3) in a position just south-east of the original random tippler location;
  • A sampling plant (Ingo 3);
  • Extension to the related conveyor network, adding 3.8 km of conveyors to the system (C14, C15, C16, C460, C508, C610, C623);
  • A stacker reclaimer (Stacker Reclaimer 6), installed to service the new stockpile I-Line and existing, as well as extended, J-Line;
  • Extension of the travel range of Stacker Reclaimer 7;
  • Construction of an additional 26 ha of stockpile area which will accommodate an additional 13 stockpiles and increase stockpile design capacity by 1,8 million tons. This is accomplished by the relocation of the Carriage and Wagon repair facility to the eastern side of the rail loop by Transnet Freight Rail, in order to make way for the new stockpile I-Line and a 300-metre extension to the existing Phase III stockyard. The stockpiles are to be located immediately south and south east of the existing site;
  • Extension of the travel range of Shiploaders 3 and 4 to service the extended quay;
  • Electrical reticulation required for a 6.8 MVA increase in electrical demand;
  • Civil engineering work associated with the above;
  • Replacement of the Terminal Control System;
  • Provision of associated roads, services and miscellaneous building work;
  • 280 metre extension of the quay (by Transnet National Ports Authority) to provide five full berths of 350 m each; and
  • Relocation (by Transnet Freight Rail) of the Carriage and Wagon facility to the far eastern side of the rail loop.

Click to enlarge image

Phase V - 91Mt/a Diagrammatic Scope of Work

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