Top African coal port lifts European sales even amid disruptions

South Africa’s Richards Bay Coal Terminal, the continent’s biggest export facility for the fuel, increased shipments to Europe last year to meet increasing demand even as the project struggled with infrastructure disruptions.

Security issues, a wage strike and equipment shortages for state-owned rail operator Transnet SOC Ltd. cut coal deliveries from mines to the port, contributing to overall exports from Richards Bay declining 14% to 50.4 million tons in 2022, the lowest in about three decades. Still, the logistics challenges proved to be no match against Europe’s demand for energy supplies.

Shortly after Russia’s invasion of Ukraine in late February, traffic on the previously infrequent trade route for coal shipments from South Africa began to increase. Richards Bay ended up sending over 14 million tons to the continent in 2022, accounting for over 28% of total shipments, Chief Executive Officer Alan Waller said in a presentation Thursday. Europe only accounted for 4% of the exports in the previous year. 

But the overall industry continues to be hamstrung in South Africa. Transnet last year declared force majeure on its main coal export line after a train derailment and violence that delayed recovery operations. Richards Bay lost 22 days of shipments due to the wage strike and the train accident, according to Waller. Better security and rail scheduling strategy could help it reach a target of 60 million tons this year, he said.

Thungela Resources Ltd, South Africa’s largest exporter of power-station coal, lowered its export guidance as prices of the fuel soared to records. The constraints have forced producers including Exxaro Resources Ltd. to truck and export coal through alternative ports. Glencore Plc and Sasol Ltd. are also shareholders in the terminal.