Regional Coal: Richards Bay to become world's largest coal port

South Africa's Richards Bay Coal Terminal Co., part owned by BHP Billiton and Anglo American Plc, announced a plan to increase capacity by 28 percent, which will make it the world's biggest coal export port, Bloomberg reported Wednesday.

The port will spend US$150 million to increase the amount of coal it can ship a year to 92 million tons by July 2008, from 72 million tons.

Richards Bay, has been handling as much coal as it can as global demand surges. Inadequate rail links cut exports last year by as much as 6.1 million tons, South Africa's Chamber of Mines said. The port, the world's second-biggest handler of coal behind Newcastle in Australia, may expand even further depending on demand.

Richards Bay handled 65.9 million tons of coal last year after problems with its rail links cut loadings. Newcastle has the capacity to handle 77.8 million tons of coal a year, according to the Australian Coal Association's Web site.

BHP owns 37 percent of the existing terminal and has the right to use that proportion of its capacity. Anglo owns 27 percent and Xstrata holds 21 percent. The other shareholders are Total SA, Sasol Ltd., Kangra Coal Ltd. and Eyesizwe Coal Ltd.

South Africa is the world's fourth-largest exporter of coal used in power plants, last year sending 79 percent of its shipments to Europe. The Netherlands was the biggest buyer.

While most of the additional tonnage will be shipped to Europe, some may also go to India, Redman said.

Europe ``is the natural market for South African coal,'' he said. ``India is an emerging market. That will be an area where Richards Bay will ship to." (*)