Julie Bain
18 February 2004
Johannesburg — Allocations to be granted for three years
BLACK empowerment coal companies keen on a share of the 2- million tons of available export capacity through the privately held Richards Bay Coal Terminal (RBCT) must hand in their applications to the special subcommittee set up by the minerals and energy department by Friday.
The subcommittee will review the applications and the companies should know by the end of March if they have been granted some of the new export allocations that have been made available.
The allocations will be granted for three years and will be reviewed annually. Should a company fail to fulfil its user agreement, the right to export will be revoked .
After years of negotiations the shareholders of RBCT and the National Ports Authority signed an agreement in January. This allowed the 10-million-ton Phase 5 expansion at SA's largest coal export terminal to go ahead.
The agreement also involved plans to "expand this into (empowerment) opportunities", said Roger Wicks, a director of RBCT and executive vice-president of global strategy, marketing and sustainable development at Anglo Coal.
Wicks was speaking at the coal export forum yesterday in his capacity as an RBCT representative.
The ports authority had earlier refused to give the go-ahead for the Phase 5 development until it had received a guarantee that non-RBCT shareholders would also have access to capacity through RBCT.
After protracted negotiations, an agreement was reached in December to allocate 2-million tons of capacity for 2004-05, starting April 1. Three million tons will be available to non-RBCT shareholders for 200506, and 4-million for 2006-07 and beyond.
At the forum in Johannesburg yesterday, representatives of SA's coal industry were told that 70% of the total tonnage would be ring fenced specially for empowerment companies each year.
The rest of the allocation can be awarded to other companies that are termed "common users".
The special subcommittee of the coal forum will be set up to deal with the applications. The committee's recommendations will be audited by an independent auditor.
To qualify as an empowerment company the companies will have to show they can produce quality export coal. They also have to show they are responsible through ownership of a coal-producing entity.
Existing shareholders of RBCT will be considered for allocation on a case-by-case basis.
Before construction of Phase 5 can begin, however, Spoornet, which runs the railway line to RBCT, has to ensure it can provide any new entrants to the local coal sector with the necessary rail capacity.
Wicks said that the funding for Phase 5, which is to come from Investec Bank, depended on these agreements being finalised with Spoornet.
Of the 10-million tons of new capacity available at Phase 5, 3,5- million tons will go to existing shareholders. Anglo Coal and BHP Billiton have said they will not take additional capacity. Fifty per cent of the remaining 6,5-million tons will be used by empowerment companies, according to the agreement.
SA's coal production for 2003 is estimated at 232,9-million tons, valued at R26,86bn.
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