Coal news and updates

RBCT reopens coal exports to Optimum Coal

The first shipments are likely in April following an agreement between the two parties.

Liberty Coal earlier said it had more than one million tons of coal stockpiled due to its inability to export through Richards Bay Coal Terminal. Image: Nadine Hutton/Bloomberg

Richards Bay Coal Terminal (RBCT) and Liberty Coal, new owner of the Optimum Coal Mine (OCM), have reached an agreement that will allow Optimum to export coal through the port once rail arrangements with Transnet have been finalised.

In a joint statement issued on Monday, RBCT and Liberty Coal say they expect the first coal to be railed to the port in April.

Read: RBCT explains why it is blocking Optimum Coal exports

The agreement brings to an end a dispute between the two parties that prevented Liberty Coal from exercising its export entitlement at Richards Bay.

RBCT is owned by the country’s largest coal producers, such as Seriti, Thungela, Glencore and now Liberty Coal. It has the capacity to handle 91 million tons (Mt) of coal a year, but last year it managed to process less than 50 Mt due largely to Transnet’s crumbling freight rail performance.

OCM and the Optimum Coal Terminal (OCT) at Richards Bay were acquired last year by British businessman and former Gupta associate Daniel McGowan. Both companies, formerly part of the Gupta empire, are in the process of exiting six years of business rescue.

Read: Optimum Coal to exit business rescue after six agonising years

The companies were placed in business rescue in 2018 after local banks cut off banking facilities to the Guptas due to their widely publicised involvement in state capture.

OCM relaunch held up

Earlier in March, Liberty Coal said the relaunch of OCM was being held up by fellow RBCT shareholders and competitors, which had imposed “unreasonable conditions which can only be described as unfair, anti-competitive and/or oppressive”.

Read: Optimum Coal’s relaunch halted by dispute over Richards Bay export entitlement

RBCT hit back, saying Liberty Coal had failed to meet material suspensive conditions that would allow it to exercise its export entitlement. These conditions included the transfer of mining rights and share ownership to Liberty Coal, obtaining ministerial permission for the transfer of these rights, and setting up a community trust.

The disagreements now appear to be settled.