South African Government allows Port to remain Operational amid COVID-19 Lockdown

Last week when South African government ordered nationwide lockdown for 21 days starting from 26 March 2020 due to increasing cases of COVID-19, all the ports including RBCT that handles country’s majority coal export movement were also ordered to shut down by the country’s port authority.

However, as per the latest updates, the South African government has now reversed the port authority’s decision and has ordered all the ports in the country to remain operational amid ongoing lockdown. As per the notification received dated 31 Mar’20, all the cargoes will be now accepted for loading and unloading, with priority being given to essential commodity.

Now, according to the market reports, operations at RBCT port have been already resumed but at reduced levels and that the ships will be loaded using just three of four loaders.

While the coal miners supplying the fossil fuel to the power utility firm, Eskom were allowed to continue their operations with power generation being categorised as essential services, commercial export of coal was suspended. However, with the new orders, miners like Exxaro Resources, Glencore and Anglo American have received exemptions to export coal during the lockdown.

In case of rail movement required for transportation of coal from mines to port, Transnet (country’s largest rail network) will also resume certain operations but at a reduced level.

“While this can be good news for the South African coal exporters, will it be able to benefit the domestic industry participants remains to be seen as there will be limited manpower availability at the ports amid ongoing lockdown due to COVID-19 that has restricted the movement of the people”, quoted a South African based exporter.

India is a key destination, contributing to about 60% in South African total coal exports. While South African ports will become operational once again, its trade to India will be limited as the latter is also under lockdown for 21 days (starting from 24 March) and ‘Force Majeure’ being announced at the Indian ports. Apart from this, the sponge iron units have suspended their operations and power plants have sufficient coal stocks with them, resulting which buying interest  for coal in India at present is quite restricted.