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Apr 20, 2014, 0:37
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South Africa Targets World Coal Export Market

South African High Commission 14 February 2006
[Pressportal.co.za] South Africa is positioning itself to capture a major share of world coal demand with the expansion of the world’s second-largest coal terminal at Richards Bay and allied rail infrastructure. This will increase rail shipment capacity from mines to the port by 30%, while the port export capacity is forecast to increase from 71 million tons in 2005 to 92 million tons in 2010. Transit times and transport costs will be substantially reduced.
Reflecting confidence in the South African economy, this latest investment project addresses past under-investment and enhances South African competitiveness in commodity export markets. The economy is showing a record economic upswing that began in 1999 and continued throughout 2005, with the third quarter marking the 24th consecutive quarter of uninterrupted growth. Latest assessments indicate GDP growth for 2005 was 5% and on course to achieve GDP growth of 6% in 2006.

The state-owned Transnet transport group’s freight operator, Spoornet, is ordering 110 new locomotives for the Richards Bay coal rail link from Mitsui & Company African Rail Solutions in a £300 million deal. This is the first stage of a planned £2.35 billion capital investment programme over the next 5 years.

The Richard’s Bay coal terminal, the second largest in the world, announced a £900 million investment programme in 2005 and will add to this an additional £850 million to increase export capacity. The National Port Authority is planning an additional coal terminal berth involving investment of £40.38 million.

This new investment, between Transnet, the National Port Authority and the Richard’s Bay coal terminal, is illustrative of the successful coordination of the South African strategic investment programme.

Ongoing infrastructure investment projects have contributed to South Africa’s recent ranking in the 2005 GCI global competitiveness index above EU founder members Italy and Greece, recent EU entrants Poland and Cyprus and the economies of China and India.

Strategic infrastructure investments have been instrumental in attracting new foreign direct investment to South Africa. UNTCAD released figures in January 2006 showing that South Africa has emerged as a world leader in new FDI since 2003. In terms of FDI by value, South Africa outperformed countries like India and South Korea. This confirms S&P’s (local currency) credit rating upgrade to A+ in August 2005.