Date: 26 January 2024

South Africa’s coal export landscape faced a severe setback in 2023, with shipments from the country’s largest coal export facility, Richards Bay Coal Terminal (RBCT), plummeting to the lowest level in over three decades. CEO Alan Waller revealed that only 47.2 million tons of coal were shipped last year, marking the lowest volume since at least 1992.

The downturn was attributed to disruptions in rail services that hampered deliveries from mines. Despite Transnet’s initial target of delivering 60 million tons to RBCT, persistent challenges, including a shortage of locomotives, derailments, and criminal activities, led to the sixth consecutive annual decline in shipment volume.

Transnet’s operational hurdles showed little improvement, culminating in a train collision on the coal line just outside Richards Bay on 14 January 2024.

Looking ahead, RBCT has cautiously set a “budgeted rate” of 50 million tons for exports in the current year, aligning with the coal reaching the facility by rail from the mines. This strategic move acknowledges the ongoing rail constraints faced by the industry.

The surge in coal prices following Russia’s invasion of Ukraine allowed miners to turn a profit by transporting fuel via trucks, bypassing rail limitations. However, the subsequent decline in demand has affected this workaround.

Notably, Thungela Resources, South Africa’s leading coal miner by market value, has refrained from using trucks recently, while Exxaro Resources has adopted the trucking option “opportunistically.”

A consequence of the mounting coal stockpiles is the potential for smaller miners to halt production. European imports of South African coal from RBCT saw a significant decline of 57%, reaching 6.1 million tons in 2023. In contrast, India emerged as the primary destination, receiving 19.7 million tons from the facility.

The challenges faced by South Africa’s coal industry reflect a complex interplay of global events, operational hurdles, and shifting market dynamics, signaling a turbulent period for one of the country’s key economic sectors.