SA’s coal exports surged by double digits in 2024 — the first time in more than five years that exports are on an upward trajectory.
This comes as efforts to fire-up the country’s embattled logistics sector show early signs of progress after an extended period of rail underperformance.
Richards Bay Coal Terminal (RBCT) said on Friday that exports last year went up 10% to 52-million tonnes, from 47.2-million tonnes a year earlier, with the terminal targeting 55-million tonnes this year.
RBCT’s performance in 2024 marks a stunning reversal in fortunes from 2023 — where it exported 47.2-million tonnes, the lowest level since 1992.
However, RBCT, owned by mining companies including Thungela, Exxaro and Seriti, is not out of the woods yet, with the entity still grappling with derailments and spares availability.
Thungela last month told shareholders that export saleable production in SA for the year ended December is expected to be at about 13.4-million tonnes, higher than the guidance range of 11.5-million tonnes to 12.5-million tonnes, and about 9% higher year-on-year.
It said this is in line with improved mine productivity and rail performance in the second half of the year, and that the various Transnet Freight Rail (TFR) initiatives, supported by the coal industry, were bearing fruits.
RBCT and TFR in 2023 entered into a mutual co-operation agreement to foster collaboration and stability in the coal supply chain, and TRF a year ago took delivery of seven full sets of batteries bought by RBCT.
The coal industry has stepped in to provide financial assistance to cash-strapped Transnet to procure locomotive spare parts.
Since 2019, Transnet has been struggling to get a service provider that can assist in supplying spare parts for some of the trains it bought in a controversial deal for 1,064 locomotives. It has about 200 locomotives that remain idle and cannot be returned to the railway lines as the Chinese Railway Rolling Stock Corporation (CRRC) refuses to provide it with spare parts.
The CRRC locomotives were intended for use on the north, northeast and Cape corridors, which account for about 50% of TFR’s revenue and support the primary exports of coal, chrome and manganese miners.
Tax bill
The main issue is the R3.6bn tax bill the SA Revenue Service imposed on CRRC after a tax audit concluded there was prima facie evidence that the company overstated the price of locomotives sold to Transnet. This as part of what has since become known as state capture.
RBCT was established in 1976 with an original annual capacity of 12-million tonnes, and has expanded into an advanced 24-hour operation with a design capacity of more than 70-million tonnes a year.
The rebound in coal exports comes at a time that SA’s rail network is going through the biggest shake-up in a generation.
Transport minister Barbara Creecy in December approved the publishing of Transnet’s network statement, a major step in facilitating open access to the country’s rail network by third-party operators — a move welcomed by the business community and industry players.
The move is also expected to alleviate the pressure on the road network. However, the statement shows the rail network needs enormous amounts of money for refurbishment, with theft and vandalism of Transnet’s corridors a daily occurrence.
Recently reporting a R2.2bn interim loss for the six months ended September, Transnet operates the country’s 21,323km of rail infrastructure and needs about R14bn a year of investment in its six corridors.
Coal is the mainstay of SA’s energy system, meeting about 70% of installed power generation capacity. But the 2019 Integrated Resource Plan sets out a long-term diversification of the power mix by 2030 and moves towards lightening the carbon footprint of the energy sector while meeting growing energy demand and ensuring a just transition.
Data from the International Energy Agency (IEA) shows SA consumed about 165-million tonnes of coal in 2024 as Eskom used more of the fossil fuel, with the agency expecting this to rise further as economic activity in SA has seen a slight improvement, and a reduction in load-shedding is expected to increase coal demand.
SA also has a healthy pipeline of new coal projects that are expected to produce 44-million tonnes a year, according to the IEA.
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