Media releases

07 September 2006

RMB Funds expansion of Richards Bay Coal Terminal

Richards Bay Coal Terminal Company Ltd (RBCT) has secured funding for the majority of its Phase V expansion project, which is estimated to cost R1.2 billion, through Rand Merchant Bank (RMB).

RMB, through the capital markets, provided funding of R700m for 9 million additional tons per annum of the total 19 million ton expansion which will be open to export coal producers with emphasis on empowerment parties.

The expansion will see RBCT expand its terminal from 72 million tons to 91 million tons per annum as part of its commitment to meeting the short to medium term coal export capacity requirements.

“The major difference with this transaction was that given the nature of the RBCT’s shareholding, the risk was assessed by considering the shareholders agreement and how the business was structured. Essentially, it became clear that we would be lending against a national asset and with South Africa’s standing in the export coal market, the associated risk was mitigated,” says Tony Carvalheiro, a debt capital markets specialist at RMB.

“We are very excited to be in a position to facilitate the growth and expansion of the coal industry in South Africa which brings with it significant job creation through the construction of the terminal as well as the expansion of the coal industry to meet the demands for coal exports,” he added.

As part of the Phase V expansion project:

9 million tons per annum of the expansion capacity will be open for tender with an emphasis on empowerment to facilitate the transformation of the South African coal export industry.
Special provision has been made to encourage a new generation of coal exporters by earmarking 4 million tons per annum for emerging BEE exporters, funded by the existing shareholders
South Dunes Coal Terminal (SDCT), which will be a two thirds BEE-controlled company, will take up 6 million tons per annum of the expansion funded by SDCT.
RBCT has appointed Alexander Forbes as the independent adjudicator for the tender process which commences this month.

The expansion is expected to be completed by the end of the first half of 2009.

“The scale and status of our expansion project demands that we have a funding partner with a solid and impeccable track record and reputation in the market. We are very delighted indeed to work with RMB as our funding partner for this strategic and historic growth project to the single largest export coal terminal in the world.” says RBCT Chairman, Kuseni Dlamini.

“RBCT’s expansion is perfectly supportive of SA’s vision of accelerated and shared growth as well as the broader transformation of our economy and society at large. The creation of about 3500 jobs during the construction phase and more sustainable jobs in the upstream parts of the coal mining value chain will make a positive impact to SA’s growth and development. This expansion will increase SA’s share of the global coal market and, more importantly, enable BEE coal mining companies to globalise their market footprints”, Dlamini added.

FOR FURTHER INFORMATION PLEASE CONTACT:
Roz Thomas
Corporate Communications Consultants (Pty) Ltd
Tel:+27 (0) 11 783 8926
Fax: +27 (0) 11 783 7608
Email: rozt@corpcom.co.za