Exxaro deliver more coking coal to ArcelorMittal

August 22, 2010 by: admin

Black economically empow
ered mining major Exxaro 
reported at the presentation of results for the six months ended June 30 that increased demand from steel producer ArcelorMittal South Africa had seen its supply of coking coal into the 
domestic market grow by 29%.

Exxaro financial director Wim de Klerk reported that, because of industrial action by Transnet Freight Rail employees and com-
plications associated with the phase four expansion of the Richards 
Bay Coal Terminal (RBCT), 
exports were markedly lower than the company would have liked.

“The decrease in the company’s 
exports gave the company the 
opportunity to push excess volumes into the domestic market. Fortunately, ArcelorMitta was looking for additional coal supply as a 
result of increased demand from the industrial sector,” said De Klerk.

Should the situation remain the same, he said, this could mean that Exxaro would increase its revenue generated from coking coal supplied to the local market.

According to an agreement 
entered into with AMSA, Exxaro is entitled to increase the price of its coking coal in the second half of the year. This is all good and well, provided the demand does not decrease.

When questioned on the outlook for the coming six months, De Klerk said that all indications pointed to the steelmaking giant maintaining its demand levels.

Although De Klerk was reluctant to provide exact figures on how much the ArcelorMittal business contributed to the company’s 10% increase in revenue, one can 
assume that it was significant if the company was experiencing challenges in the export market. However, those challenges were a result of extreme circumstances that should not occur in the second half of the year.

Exxaro executive manager Mxolisi Mgojo reported that discussions were under way with Transnet Freight Rail on making up for the tonnage lost during the industrial action. Exxaro was also in discussions with the RBCT on the port’s export capabilities once phase five of the expansion project had been completed.

Source miningweekly.com

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