Thanks Growbag1 Jul 2014 14:56
1 Jul 2014 Daily Dispatch
By SIYA MITIBusiness Reporter siyam@dispatch.co.za
EL set to lose coal terminal to Ngqura ZoomBookmarkSharePrintListenTranslate
EAST London is set to lose its coal terminal in the next three years after state utility Transnet invested more than R80-million in a coal export operation that went bust.
This came to light at the Transnet Group annual results presentation in Johannesburg yesterday.
Responding to a Daily Dispatch question, Transnet said there were plans for the East London port to temporarily handle manganese shipments until the Port of Ngqura was ready.
The state-owned company was left scrambling for solutions to ensure the R80-million plus invested into East London to support Elitheni Coal’s export operations does not become a white elephant.
Border-Kei Chamber of Business (BKCOB) executive director Les Holbrook lambasted Transnet for not having a focused strategy for the East London port, suggesting the port be privatised.
Elitheni Coal, championed by Port Elizabeth businessmen Barry Nel, David Nel and Mazizi Msutu, last year fell on hard times a year after it was launched by former Eastern Cape premier Noxolo Kiviet in 2012.
A “hostile” takeover of Elitheni by ANC chief whip Stone Sizani and Irish businessman Niall Mellon ensued last year, but not before Transnet had invested millions to support its export operations.
Speaking for the first time on the impact of the takeover of Elitheni Coal last year, Transnet Port Terminals chief executive Karl Socikwa described it as a “sad story”.
“What we have done in the interim is we have engaged other customers with a view to utilise the mobile cranes we invested in for other commodities.
“Manganese, for example, is a commodity we are looking at handling via skiptainers in the East London terminal.”
But Holbrook suggested that failed to do proper due diligence.
“The long-term sustainability of Elitheni Coal operations was not assured and the business plan was flawed.
“The quality of the [low grade] coal remains an issue and the investment in the port could have been ill-informed.”
Transnet Group chief executive Brian Molefe added that Transnet had decided to move its coal terminals from East London port to Ngqura in five years’ time.
“Mobile cranes can be moved and redeployed somewhere else. East London was a temporary arrangement until we can build a multi-purpose terminal in Ngqura to handle manganese. The coal terminal would also move to Ngqura because, as you know, MBSA was worried about the effects of the dust on their cars.”
Transnet reported revenue of R56.6-billion for the financial year ended March 2014, an increase of 12.8%. Its capital investment increased by 15.6% to R31.8-billion and profit for the year is up by 24.9% to R5.2-billion. —
Transnet
The Daily Dispatch’s trip to Johannesburg
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