Jan. 5 (Bloomberg) -- South Africa’s Richards Bay Coal Terminal, the world’s largest coal-export facility, said shipments fell for a fourth straight year in 2008 because of lower demand and erratic rail service.

The terminal on South Africa’s northeast coast shipped 61.79 million metric tons of coal last year, it said in an e-mailed statement today. That’s 6.6 percent less than the 66.16 million tons exported in 2007. The pace of exports improved in the last quarter of the year.

“The more reliable and sustainable the delivery is,” the more confident customers are in placing orders, Raymond Chirwa, the terminal’s chief operating officer, said in an interview from the site.

Derailments, a shortage of capacity on the rail lines and lower orders confined deliveries to 62.66 million tons. The terminal, which currently has the capacity to ship 76 million tons of the fuel annually, will expand to 91 million tons this year.

Rail deliveries are based on orders and what is available from mines, Sandile Simelane, a spokesman for Transnet Freight Rail, said in an interview, referring further queries to Richards Bay Coal.

Exports may also have been affected by increased demand for coal from Eskom Holdings Ltd., South Africa’s state-owned power company, as it replenished stockpiles.

Rolling Blackouts

Eskom, which relies on coal for about 90 percent of its power generation needs, boosted stockpiles after a combination of exhausted inventory, heavy rain and plant breakdowns led to a system failure in January that shut most mines and metal plants for five days and caused rolling blackouts in South African cities.

Some equipment was temporarily diverted to mine coal for Eskom rather than for export, Ben Magara, the head of Anglo American Plc’s coal unit in South Africa, said Feb. 19 last year. Power cuts also disrupted some coal mines.

While Magara said there was no relationship between the quality of coal used by Eskom and that destined for export, Andrew Etzinger, a spokesman for Eskom, in the same month said the utility was in talks to buy export-quality coal from companies.

Coal for shipment to European customers tends to burn better than the fuel used in Eskom’s power stations, which can blend the different grades. Eskom has never clarified whether it purchased export-quality coal.

Fani Zulu, a spokesman for Eskom, wasn’t immediately able to comment today when called and an e-mail to Eskom’s media desk didn’t get an immediate response to questions submitted. Chirwa declined to comment on the impact of Eskom’s restocking.

Credit Squeeze

The decline in shipments is not a surprise “given the amount of coal accumulation that was needed,” Manqoba Madinane, an analyst at Standard Bank Group Ltd., said in an interview from Johannesburg. Falling demand because of a shortage of credit in international markets also reined in exports later in the year, he said.

The price of coal exported from Richards Bay fell 17 percent last year to $79.50 a ton after rising as much as 80 percent to a record $176.80 in April, according to the Petersfield, England- based McCloskey Group.

Richards Bay Coal is owned by South Africa’s largest coal exporters, including Anglo American, BHP Billiton Ltd. and Xstrata Plc. While it is the world’s biggest coal-export terminal, Australia’s Newcastle port ships more of the fuel from two terminals.

Smaller amounts of South African coal are exported from Durban as well as from Maputo in neighboring Mozambique.

Possible Surprise Ahead

Exports in December were 6.11 million tons, while 5.68 million tons arrived by rail, the terminal said. Stocks at the end of the month were 2.27 million tons compared with a target of between 3 million tons and 4 million tons.

Exports from South Africa may rise this year as competitors such as Russia curb shipments, Gerard McCloskey, founder of McCloskey Group, said in an interview.

“People are used to a poor exporting performance by the South African industry,” he said. “They may be pleasantly surprised.”

Chirwa said exports may rise this year if Transnet Rail maintains its recent service levels. He declined to give an estimate.

To contact the reporter on this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net

Last Updated: January 5, 2009 09:15 EST