{"id":1023,"date":"2014-10-01T08:27:44","date_gmt":"2014-10-01T08:27:44","guid":{"rendered":"http:\/\/www.thebizsense.com\/za\/?p=1023"},"modified":"2014-10-01T08:28:18","modified_gmt":"2014-10-01T08:28:18","slug":"transnet-bhp-sign-coal-deal","status":"publish","type":"post","link":"https:\/\/www.thebizsense.com\/za\/news\/transnet-bhp-sign-coal-deal","title":{"rendered":"Transnet, BHP sign R24-bn coal deal"},"content":{"rendered":"

\"Transnet<\/a><\/p>\n

State-owned freight logistics group, Transnet and BHP have signed a whopping R24-billion on a 10-year take or pay export coal deal.<\/p>\n

Transnet boss Brian Molefe described the agreement as a massive boost for certainty for the company\u2019s expansion programmes on the export coal line.<\/p>\n

\u201cToday, we\u2019ve agreed to a 10-year contract for export coal on rail. The agreement makes the Australia-based miner the first major customer to commit to a long-term take-or-pay contract with the South African state-owned freight transport company,\u201d he said on Tuesday.<\/p>\n

Molefe said Transnet is adding close to 10 million tonnes in capacity on the loan from the current 73 million to 81 million tonnes over the next seven years.<\/p>\n

Transnet\u2019s agreement with BHP equates to a contract value of approximately R2.4 billion per annum and R24 billion over the 10-year period.<\/p>\n

Molefe said take or pay contracts are crucial to Transnet\u2019s capital investment programme as they provide revenue certainty, a key consideration for raising funds in the capital markets.<\/p>\n

Take or pay contracts mean that Transnet commits to providing trains and a customer is obliged to pay whether they have product or not.<\/p>\n

The long-term contracts provide a massive boost to South Africa\u2019s credentials as an investment destination, as they confirm the mining sector\u2019s confidence in the country.<\/p>\n

For, Transnet, Molefe said this is an indication of strengthening relations with customers, especially with regards to partnering on future plans.<\/p>\n

\u201cTransnet is confident that agreements with the remaining 28 customers will be formalised by the end of November this year.<\/p>\n

\u201cWe\u2019ve been in negotiations with the industry over the last 20 months and most customers have agreed to the terms,\u201d he said.<\/p>\n

All exporters though the Richards Bay Coal Terminal will sign individual contracts with a duration of 10 contract years, which will end on March 31, 2024.<\/p>\n

Molefe said they are committed to moving 810 million tonnes of coal over the period, including a performance guarantee.<\/p>\n

The parties have agreed that 5% of the rail contracted tonnage will be allocated to emerging miners through a transparent allocation process to be agreed to by all parties.<\/p>\n

Introduction of new players, especially black emerging miners, is a key element of government\u2019s economic agenda in which Transnet has a significant role to play.<\/p>\n

The 5% rail allocation equates to a further potential 4 million tonnes for new miners at the Richards Bay Coal Terminal.<\/p>\n

BHP is one of Transnet\u2019s and South Africa\u2019s largest coal exporters.<\/p>\n

BHP Asset President Jon Evans said: \u201cThis is a historic 10-year agreement for the railing coal.<\/p>\n

\u201cThis historic agreement will serve as a strategic enabler for the long-term viability of both BHP and the coal industry. Coal exports are a significant contributor to South Africa\u2019s Gross Domestic Product (GDP) and key earner of foreign exchange.\u201d \u2013 SAnews.gov.za<\/p>\n","protected":false},"excerpt":{"rendered":"

State-owned freight logistics group, Transnet and BHP have signed a whopping R24-billion on a 10-year take or pay export coal deal.<\/p>\n","protected":false},"author":1,"featured_media":524,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[27,691,1],"tags":[692,693,735,177],"class_list":["post-1023","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-logistics","category-news","tag-bhp","tag-coal","tag-logistics","tag-transnet"],"_links":{"self":[{"href":"https:\/\/www.thebizsense.com\/za\/wp-json\/wp\/v2\/posts\/1023","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thebizsense.com\/za\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thebizsense.com\/za\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thebizsense.com\/za\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thebizsense.com\/za\/wp-json\/wp\/v2\/comments?post=1023"}],"version-history":[{"count":2,"href":"https:\/\/www.thebizsense.com\/za\/wp-json\/wp\/v2\/posts\/1023\/revisions"}],"predecessor-version":[{"id":1025,"href":"https:\/\/www.thebizsense.com\/za\/wp-json\/wp\/v2\/posts\/1023\/revisions\/1025"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.thebizsense.com\/za\/wp-json\/wp\/v2\/media\/524"}],"wp:attachment":[{"href":"https:\/\/www.thebizsense.com\/za\/wp-json\/wp\/v2\/media?parent=1023"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thebizsense.com\/za\/wp-json\/wp\/v2\/categories?post=1023"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thebizsense.com\/za\/wp-json\/wp\/v2\/tags?post=1023"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}