With South Africa announcing lockdown for 21 days starting from 26 March till 17 March’2020, a major concern for industry participants is will Richards Bay port (RBCT) – a vital cog in South Africa’s logistics and supply chain system for coal will continue its operations amid lockdown.
Now CoalMint has heard from its reliable sources that RBCT will not continue to operate beyond 26 March 2020 citing the increasing risk of COVID-19 in the country. However, having said this, an application has been submitted to the Ministerial Committee to request an exemption for RBCT in order to support the country’s Coal Exporting Parties (“CEPS”) that would apply for an exemption to export coal during the lockdown period.
In response to this, the Minister has stated that applications will be considered on a case by case basis. In case exemption be granted to RBCT, critical sections or staff will be engaged accordingly and requested to run RBCT at a reduced rate.
“Although we have submitted the application requesting to grant permission to load the remaining vessels already at the port, we are not sure how long it will take the authorities to process the application and advise the outcome. We are hoping to receive confirmation as soon as possible to run at a reduced capacity, however the plan remains to lockdown at this stage”, quoted an exporter based in South Africa.
RBCT port’s significance for coal trade
Richards Bay Coal Terminal (Proprietary) Limited (RBCT) is one of the leading coal export terminals in the world. Opened in 1976 with an original capacity of 12 MnT per annum, it has increased its capacity to 91 MnT per annum.
Positioned at one of the world’s deep seaports, RBCT can handle large ships and subsequent large volumes. The 276-hectare site currently boasts a quay 2.2 kilometres long with six berths and four ship loaders, with stockyard capacity of 8.2 MnT. The port is well connected with South Africa’s national utility, Transnet, which provides the railway services linking the coal mines to the port, and the shipping coordination of more than 900 ships per annum.
Will it impact India’s coal imports?
With Europe cutting down its coal usage amid environmental concerns in past three years, South Africa has diverted its coal exports via RBCT to Asian countries with India leading the pack.
Now the closure of RBCT port may act as a hindrance for Indian sponge iron manufacturers that are usually dependent on imported coal for the production. However, as per our analysis India’s imported thermal coal demand is quite limited as majority of domestic sponge iron units have suspended their operations amid the ongoing 21 days lockdown in India due to COVID-19. Apart from this the traders and manufacturers in India have enough stock of South African thermal coal at present given the tepid steel demand over past two months with Coronavirus outbreak in China (since Dec’19) that had already impacted the global steel markets.
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