BHP Denies Blocking Access to Small South African Coal Exporters

BHP Billiton Ltd. (BHP) rebuffed a report that it blocked the access of smaller miners to Africa’s biggest coal terminal and said its own expansion in South Africa is curtailed by a lack of port capacity.

State port and rail operator Transnet SOC Ltd. has accused BHP, a shareholder in the Richards Bay terminal, of not doing enough to allow black-owned mining companies to use the port, Business Day reported earlier. BHP has refused to allocate greater export rights demanded by the smaller companies, the newspaper said, citing Transnet head Brian Molefe.

BHP is “disappointed by the way Transnet’s Chief Executive Officer Brian Molefe chose to portray the miner as denying small independent coal exporters access,” Manie Dreyer, president of BHP’s local coal unit, said in an e-mailed statement. The company is “short of port capacity and it is unable to even develop some of its own remaining prospecting rights.”

Shipments from Richards Bay, designed to handle 91 million metric tons of coal a year, fall short of that capacity, leaving some miners unable to export. The terminal’s shareholders disagree with Transnet over who is at fault for the low volumes, with the latter accusing holders of shutting out small exporters and BHP claiming that Transnet’s freight rail capacity to the port is insufficient.

Transnet is conducting a feasibility study for a proposed new coal terminal next to Richards Bay to cater for small miners, Molefe said in an interview in Johannesburg yesterday. The facility would have a capacity at least 10 million tons.

“The principle is if the small miners feel they are not being accommodated at Richards Bay, we will take measures to accommodate them,” Molefe said.

The CEO said he recently had a “disastrous meeting” with BHP at which they “nearly came to blows” because the company had refused to give up an extra 1 million tons of annual export allocation to junior miners, according to Business Day.

BHP owns a 21 percent stake in the Richards Bay terminal, down from 40 percent a decade ago, according to the company.

To contact the reporters on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net; Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net

To contact the editor responsible for this story: Gordon Bell at gbell16@bloomberg.net

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