http://www.miningweekly.com/article/wescoal-sees-opportunities-fo...

http://www.miningweekly.com/article/wescoal-sees-opportunities-for-juniors-in-domestic-coal-market-2011-06-22

By: Loni Prinsloo
22nd June 2011

JOHANNESBURG (miningweekly.com) ? Junior miners should take advantage of opportunities in the domestic coal market, Wescoal CEO Andre Boje said on Wednesday.

Boje said that junior miners would find it difficult to access export markets in the near to medium future because of rail and port allocations, but added that South Africa had a large domestic market in need of coal supplies.

State-owned power utility Eskom requires about 125-million tons of coal a year, but this is set to grow as the utility had forecasted supply shortages and was aiming to build up a 10% supply cushion.

Boje also pointed out that industry provided a significant market of about 16-million tons a year that needed to be serviced.

?Currently, South Africa is experiencing coal shortages in the inland market. If junior miners are able to determine their place in supplying these markets, it becomes an attractive opportunity beyond the worries of rail an port allocation,? Boje said at this years Coaltrans conference.

Also at the conference, Transnet general manager Divyesh Kalan emphasised that it was not all ?doom and gloom? for junior miners as far as rail and port allocation was concerned.

With the expansion of the Richards Bay Coal Terminal from 72-million tons to 91-million tons, certain export capacities were specifically allocated to junior and/or black empowered miners.

Kalan said that Transnet was currently busy with a strategy to create additional capacity for junior miners on rail.

Outputs on the strategy on creating additional rail and port capacity for junior miners would be released in about two months.
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