South32 ready to resume coal exports after official nod

JOHANNESBURG – South32 would restart South African coal exports during the national lockdown period at a reduced rate after receiving government approval, the company said yesterday.

South32, the diversified mining company, said yesterday that while its domestic coal operations were considered essential for maintaining power generation, its export operations were placed on temporary care and maintenance at the start of the national lockdown. “We subsequently requested and received government approval to undertake limited activity during the lockdown period and have partially remobilised at a reduced rate,” it said in its quarterly production update for March.

The JSE and Australian-listed firm said, however, that export coal sales had declined by 7percent during the March quarter as the temporary closure of the Richards Bay Coal Terminal, caused by the national lockdown, had resulted in the deferral of shipments. The average realised price for domestic coal in the nine months ended March 2020 was $24 (R450) a ton.

“In the June 2019 quarter, we invoked a hardship clause in our contract to supply coal from the Wolvekrans-Middelburg complex to the Duvha power station, with a view to securing a long-term pricing tariff that supports the sustainability of the business,” said the company.

South32 said during the quarter under review it agreed to an interim pricing arrangement to ensure continuous supply, while Eskom undertook their review of the hardship claim.