Grindrod Pushes Ahead With South African Coal-Terminal Expansion

Grindrod Ltd. will push ahead with the expansion of a coal terminal near Richards Bay, Africa’s largest export facility, even as prices for the commodity fall.

The shipping company will add 4.5 million metric tons a year of capacity in 2015, growing to 20 million tons in a second phase, Bongani Biyela, executive director of RBTGrindrod Terminals, said at an IHS conference in Cape Town. The total cost is estimated at 2 billion rand ($175 million), he said.

The terminal is finalizing a partnership “very soon” with South Africa’s state-owned rail company Transnet SOC Ltd., Biyela said.

Glencore Plc’s Optimum Coal unit may shut some operations and reduce annual output at least by half as export prices decline, the Swiss commodities trader announced Jan. 28. About half of Optimum’s 10 million tons of vendible output a year is exported.

“We are comfortable that as a collective, if a company can’t produce coal, another will make it up,” Divyesh Kalan, general manager of Transnet, said at the conference.

Richards Bay Coal Terminal has a target to handle about 74 million tons this year, according to CEO Nosipho Siwisa-Damasane. No one has approached the terminal about supply changing, she said.

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