Durban - A R1 billion investment in the Richards Bay coal terminal, in which Anglo American and BHP Billiton are shareholders, will increase capacity by about 28 percent to 92 million tons a year and could earn the country about R6 billion in foreign exchange revenue.
Tony Redman, the chairman of Richards Bay Coal Terminal (RBCT), said: "The extra capacity could bring around R6 billion per annum of foreign currency into South Africa and has the potential to earn around R1 billion a year for Spoornet.
"Such infrastructure growth will help to support the government's objective of 6 percent gross domestic product growth."
Black economic empowerment (BEE) exporters will get preferential access to the new capacity that will make the facility at Richards Bay deep-water port the world's largest coal export terminal. At present Australia has the largest coal export facilities with a combined total of 89 million tons a year.
The expansion at Richards Bay, which will be completed by July 2008, is over and above investment by Transnet on infrastructure for coal exports. The National Ports Authority (NPA) will spend R430 million on a new berth at the terminal that will increase the number of berths to six.
Spoornet is expected to spend R3.8 billion over the next five years on upgrading the coal line between Witbank and Richards Bay. The expansion plans follows an agreement signed between RBCT, the NPA and Spoornet in 2004 whereby the NPA and Spoornet agreed to invest in upgrades if greater capacity was allocated to BEE coal producers.
Redman said: "We are excited about the expansion and believe it reflects the spirit of transformation in South Africa.
"The additional tonnage will be mostly allocated to BEE companies and thereby open up opportunities for BEE coal mining companies that have not previously been able to export coal," he said.
The cost of the expansion will be borne by RBCT's shareholders, which are Anglo Coal, BHP Billiton's Ingwe, Xstrata, Eyesizwe, Kangra Coal, Sasol and Total Coal South Africa. By April next year, up to 4 million tons a year will be allocated to emerging BEE exporters.
South Dune coal terminal, which has a 66 percent BEE shareholding comprising the larger BEE coal producers, will fund and be allocated 6 million tons a year. Black company Eyesizwe exports about 1.2 million tons a year, which will rise to about 4 million tons following a deal whereby Kumba Resources will be split into two entities.
Anglo said last month that one new entity would be a dedicated iron ore company and the other a diversified mining company that would include the coal assets of Eyesizwe, and the mineral sands and zinc assets of Anglo American.
At Richards Bay coal terminal, the balance of 10 million tons a year would be open to subscription to all shareholders. The process to subscribe for the additional capacity will begin in the second quarter next year and is expected to be allocated through new shareholding or commercial usage arrangements at internationally competitive rates.
Anglo American shares yesterday closed 1 percent lower at R196, BHP Billiton shares dropped 2.45 percent to R97.20, while Sasol stock gained 75c to R212.85.