The private-sector-owned Richards Bay Coal Terminal (RBCT) last week announced a R1.34-billion equipment replacement project to boost South Africa’s coal supply chain and replace ageing equipment with minimal impact on the business of the coal terminal.

To be replaced after 39 years of service will be two stacker reclaimers and two shiploaders, plus the reconfiguration of substations.

Award-winning RBCT CEO Nosipho Siwisa-Damasane said that a local content of 57%, worth R768-million, was being targeted together with contract winner Sandvik Mining Systems, which is partnering the RBCT to expand its footprint in the coal industry.

“Although the coal industry is feeling the pinch, it would have been short-sighted not to go ahead with this replacement project,” Siwisa-Damasane told Creamer Media’s Mining Weekly.

Potential project spend in the Richards Bay area itself is 18.2% of the capital outlay, worth R140-million.

To be installed are two 6 000-tonne-per-hour (tph) rail-mounted stacker reclaimers, with the capacity to stack at an average rate of 5 500 tph and reclaim at 4 500 tph, and two new 10 000 tph rail-mounted shiploaders, which will have the capacity to load ships at an average rate of 8 500 tph.

Five existing electrical substations will also be reconfigured, with one new substation added.

Project manager Aurecon South Africa will supply engineering, management and specialist technical services to the stacker- reclaimer and shiploader replacement project and Norconsult Iyanda will provide project management of the substation reconfiguration.

RBCT chairperson Mike Teke said in his opening remarks that, although the global coal industry was going through a difficult time, the machinery programme being introduced by the RBCT was being implemented in the belief that the industry would recover.

The RBCT has a fully fledged ramp-up plan with State freight logistics group Transnet Freight Rail (TFR) in which 74-million tonnes is targeted for this year, followed by 77-million tonnes and then 81-million tonnes over five years.

The first stacker-reclaimer will be replaced in early December 2017 and the second in mid-January 2018.

The first shiploader will be replaced in June 2017 and the second in early August 2017.

Funding will be provided by Rand Merchant Bank, underwritten by the shareholders of the terminal.

The RBCT operates on a cost breakeven basis and, although the capital expenditure will have an impact on its cost per tonne, increased projected tonnage will progressively lower that impact.

The machinery now in service will not be taken out of service until the new machinery is ready to go into service.

“The beauty of the project is that we will not take the old out until the new is in and there will be a quick changeover,” veteran engineering and project manager Bill Murphy reported.

The replacement decision follows two years of study, with the removal of the old machines synchronised with the installation of the new ones.

TFR, which rails the coal to the RBCT, is budgeting for continued growth in coal export volumes in 2015/16, despite weak commodity market conditions.

The group railed 76.3-million tonnes of export coal last year, a material 12% increase on the 68.2-million tonnes achieved in 2013/14, acting CEO Siyabonga Gama said.

TFR is budgeting for an increase in export coal volumes to 77-million tonnes this year, covered by its take-or-pay agreements with all 36 rail users.

TFR recently concluded take-or-pay contracts with its mining clients, including all coal exporters. “We have signed very good take-or-pay agreements with all the coal exporting parties. So we have an expectation that 95% of what is planned will be railed,” Gama said during this week’s presentation of results.

Gama confirmed, however, that the investment decision on the Swazilink project had been delayed, owing to “geotechnical” difficulties associated with the initial route. The project would divert general freight through Swaziland in a bid to raise the Richards Bay line’s yearly capacity to close to 100-million tonnes.

The business plan had been completed and new routes verified, but Gama indicated that the initial completion date of 2018 would be shifted to either late 2019 or 2020. It was pushing ahead, however, with studies to open up a coal-export line from the Waterberg.

The 519-employee RBCT, which is owned by the 12 coal mining companies that use it, has a 28.29% black economic-empowerment (BEE) shareholding, with black women making up 3.11% of the BEE stake.

Four-million tonnes of capacity under RBCT’s Quattro banner is allocated to 23 junior miners.

In 2014, an average of 27 trains a day – based on a 100-wagon yardstick, although they arrive in 200-wagon batches – called at the terminal, with the coal going to 41 countries – 67% to Asian countries, 25% to Europe and 6.5% to Africa.

Trains are scheduled to the terminal from 49 loadout points in the KwaZulu-Natal and Mpumalanga provinces.

Some 50 km of 2.2-m-wide belt conveyors, moving at a rate of up to 22 km an hour, transport most of the coal directly to 92 individual stock areas, where yard machines stockpile the coal at a rate of up to 6 000 t an hour.

Coal is reclaimed from the stockpiles into four silos and then onto ships.

Siwisa-Damasane’s general management team is made up of Alan Waller (finance), Jabu Mdaki (operations), Judith Nzimande (human resources), Murphy (engineering), Kubendren Naidoo (maintenance), Zanele Mthiyane (health, safety, environment and community) and Casper Mbuyazi (legal, risk and compliance).

Coal export from the RBCT is a 24-hour operation with a design capacity of 91-million tons a year.