Although a potential hard landing for the Chinese economy and the ongoing threat to prosperity in the Eurozone are casting clouds over steel markets, that is not dimming the faith of the world’s biggest miners in long-term iron ore demand, writes Michael King.
As the second quarter financials of the world’s leading commodities suppliers started to appear in July, the contrast between the outlook for the global economy — the health of which is usually reflected in steel demand — and the eye- catching optimism of iron ore suppliers was stark.
China, the key buyer of iron ore, saw economic growth slip to 7.6% in the second quarter, and fears of a hard landing were growing as DCI went to press. This year global financial markets have also become hotbeds of uncertainty as Eurozone political leaders have attempted — and largely failed — to find ways to lend long-term stability to Europe’s more ravished economies. But even as the IMO cut its global GDP growth forecast for 2013 from 4.1% to 3.9% in July, the biggest iron ore miners were adamant that they would press ahead with efforts to boost supplies in the years ahead.
Rio Tinto achieved record half-year iron ore production in the first six months of 2012 of 120mt (million tonnes), up 4% compared with a year earlier. Some 115mt was shipped overseas and the company said it would further expand its Pilbara iron ore business in Australia to increase total annual production capacity to 353mt.
Fortescue Metals Group also reaffirmed, as previously reported in DCI, that it would boost output to 155mt by June next year. The firm progress being made by the newest major player on the iron ore block was apparent in the quarter to the end of June when FMG’s output reached 17.8mt, up 42% year- on-year.
BHP Billiton, which plans to double its global output in the years ahead, also boosted its output to 40.9mt in the quarter through June, up by 15% year-on-year.
The performance of Brazilian giant Vale was less commanding than those of its Australia-based rivals. Second quarter production rose 0.4% to 80.5mt, although overall Brazilian exports increased 2.1% in the quarter as expanding Asian demand offset a slump in European orders.
The increases in iron ore supply in the early part of 2012 built upon the major output boosts achieved in 2011 when exports increased for the tenth year in a row, expanding some 7.9% to 1,115mt, according to the The Iron Ore Market 2011–13, published in July by the United Nations Conference on Trade and Development (Unctad).
Australia’s exports increased by 8.9% to 438.8mt last year compared with 2010. Brazilian exports, which had suffered a sharp decline in 2009, bounced back with some aplomb, rising 12.1% to reach 348.6mt. However, India, the third largest exporter in 2011, saw its exports fall for the second consecutive year, down 17.8% to 78.8mt.
China remained the driving force in import markets in 2011 when it increased its imports to some 686.7mt, up 11% year- over-year and equal to almost 60% of world imports. Japan, in second place, saw imports fall by 4.4% to 128.4mt, while in
Korea imports rose 15.3% to 64.9mt. European imports, still fighting back to 2008 levels, also rose substantially in 2011 - up almost 17% last year to total 156.4mt.
More iron ore capacity will soon be unleashed onto world markets, but the question many analysts are asking is whether steel markets will be able to absorb it.
Unctad notes that as of May this year the total global iron ore project pipeline due to come on stream by 2014 totalled a mighty 796mt. 270mt of this was categorized as ‘certain’, 220mt was ‘probable’ and the rest was classed as ‘possible’. “It may, with some degree of confidence, be assumed that around 510mt of new capacity will come on stream in the period up to and including 2014,” said the report.
These huge increases in supply were mostly planned as the global economy appeared to be accelerating away from the 2008–09 Global Financial Crisis and subsequent recession which decimated steel consumption. World crude steel production made an impressive recovery in 2010, but since then growth rates have slowed, mirroring the faltering economic steps made in the US, Europe and China. According to the World Steel Association, global apparent steel use increased by 5.6% in 2011, down from the growth of 13.2% recorded in 2010. China, the key to global demand for iron ore, increased its usage by a huge amount in tonnage terms, but year-over-year growth slowed to just 6.2% last year.
In 2012 that pattern has continued. Global crude steel production during the first four months of the year was only 2.1% higher than in the same period in 2011. In China it rose 2.7%, markedly slower than in previous years.
The latest World Steel Association short term forecast for world steel use predicted demand would increase by 3.6% over the course of 2012, followed by an increase of 4.5% in 2013, although continued lower output in China could see that figure revised downwards.
“On the basis of the prospects for a return to stronger growth in the second half of this year, we expect world crude steel production in 2012 to be about 1,530mt, or about 4% higher than in 2011,” said Unctad. “Beyond 2012, we would expect steel use and production to increase at an annual rate of just below 4%.”
But, Unctad warned, China’s performance will be critical to the forecasts given its weight in the global steel market. “We project annual growth in China’s crude steel production to be 4.4% over the period 2012–2015, while steel production in the rest of the world would grow at a rate of 3% per year,” said the report. “Therefore, the successful reorientation of Chinese growth is essential both to the health of the world economy and to continued steel demand growth.”
Apart from the China factor, the other major cloud over the steel market is the potential break-up of the Euro. This, according to most analysts, would produce a global recession of at least 2008–09 proportions, with similarly dire implications for steel demand.
Even if China remains stable and the Euro holds steady, and assuming Unctad’s forecasts prove correct, the rate of growth in steel demand forecasts is still appreciably lower than plans for iron ore expansion by leading exporters. However, the collective optimism of miners is built on firm foundations despite the seeming discrepancy.
Firstly, Chinese steel consumption may have slowed but it is still growing and this will require imports. Not least this is because domestic iron ore suppliers have struggled in recent years to boost output, and the iron content of ore produced at many mines continues to deteriorate. Many are also operating on such slim margins due to cost inflation that any price depreciations hits profits hard. All of this points towards greater imports in the years ahead.
Second is the India factor. India has been a key player in the iron ore markets over the last decade, exporting up to 100mt per annum until recently when Karnatka state, the main source of iron ore in India, increased its export duties. Even though restrictions are set to be removed, with domestic usage growing it is unlikely that India will resume such a prominent role in export markets any time soon.
The concept of ‘peak steel’, which insists that global demand will reach a plateau as Chinese growth slows and European production is cut in the years ahead thereby putting downward pressure on steel and iron ore prices, also contains flaws. Most obviously this is because the size of the Chinese market is now so great that even small steel demand growth can mean a huge boost to iron ore imports. This year, for
example, China imported 8.9% more iron ore in the first five months of the year than it did in 2011. At that pace China will import almost 750mt by the end of the year.
The inadequacies of domestic supply coupled with the sheer size of China’s steel industry mean that it would take a huge drop in steel output in China for iron ore imports to suffer a major, prolonged volume reverse and this should provide some pricing stability.
The ‘peak steel’ theory also fails to acknowledge that the world’s largest miners have the ability to adjust their output. The Big 3 — Vale, Rio Tinto and BHP Billiton — controlled some 34.7% of world production in 2011. In a declining market they could easily reduce production or slow the pace of expansion.
The Big 3 supplied some 60% of China’s iron ore requirements last year. For them a bigger concern is efforts by Chinese buyers to diversify supplies. Wang Xiaoqi, vice-chairman of the China Iron and Steel Association, said recently that buyers would try and source more ore from independent miners where possible in the future.
Chinese government policy is also taking a similar direction with China aiming to control at least 50% of its iron ore imports by 2015 to reduce exposure to import price fluctuations. This has been one of the driving factors in Chinese investors’ efforts to secure overseas stakes in iron ore mines in recent years. Last year, for example, Hongda secured an 80% stake in the Tanzanian Liganga project for USD$3 billion. Hanlong acquired an 81% share of the Australian junior Sundance which operates a number of high quality projects in Cameroon. And Hebei Iron & Steel Group purchased a 20% interest in the Canadian Alderon project for USD$87 million.
In 2010 a similar pattern was also in evidence. Shandong bought 25% of the Tonkolili project in Sierra Leone, Chinalco acquired 47% of the Simandou project in Guinea from RioTinto, and East China Mineral Exploration and Development Bureau bought Itaminas in Brazil from its private owners.
An acceleration of this dual strategy by the Chinese government and steel industry would reduce miners’ ability to control supply. 
However, the overall market looks likely to stay relatively stable, according to Unctad. It estimates that global iron ore use will increase from 1,922mt in 2011, to about 2,000mt in 2012, and to 2,080mt in 2013.
Its latest report admits that while the supply side of the iron ore market looks over-cooked and a surplus looks likely to develop. But Unctad points out that doubts surround a number of expansion projects, especially because of the limited financing available for smaller projects and likely delays in completing many others.
“Most importantly, the market will be tight due to the existence of two mechanisms placing a cushion under prices,” said Unctad. “The large iron ore producers can implement their expansion plans with a great deal of flexibility. And a considerable segment of the Chinese iron ore mining industry, probably as much as 200mt in annual capacity, would close if
prices were to fall dramatically below present levels.” These factors will see the market moving towards a balanced
supply and demand situation, with equilibrium to be reached in 2013 at the earliest. “The market will remain tight, with a strong possibility of modest price increases during the second half of 2012, and the next few years will be characterized by a gradual adaptation of supply — by way of the addition of new capacity — to a continuously growing demand,” said Unctad.
“Prices, while declining slowly from 2013 onwards, will stay sufficiently high over the next couple of years to keep the Chinese iron ore mining industry operating at lower, but not disastrously low, levels of output - that is, between the 222mt produced in 2009 and the 322mt achieved last year.
“Prices will remain at levels that must be considered high from a historical perspective, with a floor at around US$120 per tonne delivered in China.”
 
 
 
Export duties and punishing restrictions result in falling exports from India
The Achilles heel for the world’s leading mining groups like BHP Billiton,Vale and Rio Tinto is their very large exposure to iron ore, the prices of which have dropped over 25% in the past 12 months, writes Kunal Bose. What further clouds the outlook for shares of mining companies is that iron ore prices are yet to find the floor. No less a man than BHP Billiton chairman Jac Nasser expects the mineral prices to fall further. At what prices iron ore will sell depends on demand emanating from steelmakers, particularly from the industry dominating China. In its turn, how well steel will do depends entirely on the behaviour of the broad economy. The International Monetary Fund’s latest World Economic Outlook update does not bring any cheer to the mineral sector per se and the results are abundantly evident in
the behaviour of iron ore prices. The CEO of Rio Tinto Tom Albanese says as the global economic condition and sentiment dropped markedly in the past quarter, he is keeping an eye on US recovery, unending crisis in Euro zone and impact of efforts to stimulate the Chinese economy. Unarguably, the last of the three points under Albanese watch has the most significant bearing on seaborne trade in iron ore and its prices.
According to World Steel Association, in the first six months of 2012, the global crude steel production rose 0.9% year on year to 766.9mt (million tonnes), though significantly for the iron ore market the June steel production was down to 128mt from 131mt over the previous month. China, the world’s biggest producer and exporter of steel like any other metal, reported a marginal fall in June output to 60.213mt from the earlier month’s 61.234mt. A major Indian exporter of iron ore to China says, “any fall in Chinese steel output as we saw in June sends out bearish signals for the ore market. This has come in the wake of large build up of stocks of close to 100mt of iron ore at Chinese ports.” China having a share of over 60% of the world seaborne trade will always have a decisive influence on ore price behaviour. Last year, the country imported 686mt of ore, a rise of 11% on 2010. In the first half of 2012, Chinese ore imports rose 9.7% to 370mt from a year earlier. While this may be so, the ore market primarily takes its cue from the performance of the world steel industry and the general economy and at what prices China buys ore.
July’s first half saw Chinese steel production crawling up. But as the world’s second largest economy grew at its slowest pace at 7.6% in three years in the second quarter of 2012, the demand for steel from the construction, automobile and machinery sectors got drained. No wonder the average price for the benchmark product hot rolled coil fell for many straight weeks in China. This and also grim demand prospects for the rest of the year, have made Chinese steel producers, the latest to join the list is Wuhan Iron & Steel Group, to issue profit warnings. In this situation, disappointingly low rates of Chinese steel futures contracts and spot iron ore prices will not come as a surprise. Unlike in the pre 2008/09 recession times when the Chinese steel industry registering a double digit growth rate made iron ore and coking coal hot commodities, it is now showing a subdued appetite for ore. Traders complain that Chinese clients are checking cargoes, but the genuine interest to make deals and take deliveries is lacking. As one of them says, “the gap between their bids and our offers is quite big up to $7 a tonne. Indifference to buying from stocks at ports is in evidence. In difficult times like now with margins narrowing in steel thinning, it is expected that metal producers will like to do with limited inventories of iron ore and going for replenishments in small volumes. So you find them buying small lots in the spot market.”
It almost became conventional wisdom that in emerging economies like China and India, steel demand growth rate will be ahead of GDP’s progress. But in now both the countries while GDP growth rate has fallen, steel demand is trailing the former by some percentage points. In fact, the growing slackness in steel demand, particularly in Europe which will be seeing more idling of capacity resulting in iron ore price falls is leading mining groups to go slow with development of new iron ore mines and expansion of operational mines. The major ones held back for one reason or the other include Anglo American’s Minas Rio in Brazil, Rio Tinto’s Simandou in Guinea,Vale’s $8bn expansion of Serra Sul in Brazilian Amazon and Hancock Prospecting’s Roy Hill development in Australia. There never is finality about forecasts by research houses, the dynamics of industry working being subject to changes by how the economy fares. At the same time, mining groups are closely looking at a forecast saying that the world steel capacity and production could be nearing its peak level. Earlier, it used to be said that China, which nearly has a 45% share of global steel production would reach its output peak at 1bn tonnes. This now has been scaled back to 800mt. For miners, a big challenge is to correctly anticipate future demand so that oversupply does not play spoilsport for the iron ore market.
The likes of BHP, Vale and Rio also have to take into account the Beijing strategy of progressively reduce its import dependence on big miners by encouraging Chinese companies to go out and buy mineral assets wherever available. Thanks to China liberally extending lines of credit for infrastructure development like building ports and establishing rail and road connections between mines and ports to least developed and developing countries, its companies could pick up some rich iron ore assets in Africa in particular much to the consternation of Western countries.
Chinese companies are also making deals and signing joint venture agreements to get assured supply of portions of mines production. Like Chalco of China is partnering Rio to develop Simandou iron ore project in Guinea. Parallel to overseas initiatives, China is going full blast to raise domestic production of iron ore, much of it though of poor quality. Expect China to produce up to 1.55bn tonnes of ore this year which in terms of quality of imported ore will, however, equal to 591mt. Chinese ore output in 2011 was 1.33bn tonnes.
In the meantime, as India is pursuing a steel capacity development target of 200mt by 2020, the government has thought that it will be in order to scale down the cut off point of iron (Fe) content in locally mined ore to 45% from the present 55%. The mines ministry puts the country’s ore reserves at 28.5bn tonnes, which will rise by at least 5bn tonnes with the lowering of Fe cut off point. Welcoming the move, the Federation of Indian Mineral Industries director general R.K. Sharma says,“the supply of low grade iron ore will require of the Indian steel industry to create adequate facilities for beneficiation, sintering and pelletization. There has been some progress in treatment of ore fines for local use. At the same time, I don’t find any justification to have such high tariff barrier to India exporting iron ore.” Export duty of 30% and punishing mining restrictions in ore rich states like Karnataka and Goa saw Indian overseas sales of ore falling from nearly 100mt in 2010/11 to about 60mt last year. Exports in 2012/13 are likely to fall further to 50mt.
 
 
 
Brazil’s 2011 record exports of ore unlikely to be repeated
Nothing is impossible, but the record exports of iron ore from Brazil in 2011 and the record earnings of the year as well, are unlikely to be repeated for some time.
A record 331mt (million tonnes) was shipped in 2011, 20mt, or 6.4% more than in 2010.
The average price of the ore, $126 per tonne, was 36% higher in 2011 than in 2010 as well.
As a result, the sale of iron ore earned Brazil almost $42 billion dollars last year, a record 16% of all export earnings and $13 billion, or 45%, more than in 2012.
The main reason for all the records was, of course, China, which bought almost 165mt of Brazilian ore last year, virtually half the total and paid virtually $20 billion for the privilege.
With the Chinese economy expected to grow by ‘only’ 7.5% or so this year, compared with 9% plus in 2011, there will be no repeat of last year’s records this year, however.
Three million tonnes less ore was exported in the first five months of this year than in the same period of 2011, a reduction of almost 19%, while the average price of the ore had fallen by 18% as well.
The result was that ore exports had earned Brazil almost $3 billions less from January to May this year than in the same period of 2011, a fall of 18%.
There are almost as many opinions as to how the Chinese economy will behave from now on as there are analysts.
The problems in the developed world of the past few years — notably in Europe and the United States, the main destination for China’s exports of cheap manufactured goods — mean much less is being sold to these markets, so less is being made. In China itself, the government took steps to cool the booming housing market at the end of last year, as — with few alternatives — many Chinese had taken to spending their massive savings on buying properties.
Sixty per cent of the 750mt of steel made in China in recent years has been used in the housing sector.
However, the government wants to prevent the housing market falling too far and causing a panic, so measures to ensure it continues to grow have been taken more recently. More cars are now being sold in China than in any other country in the world. Although spending on infrastructure — such as railways, roads, ports, dams and bridges — has slowed from the peak of a few years ago, it is still growing fast.
Demand for steel, most still produced in hundreds of relatively small independent mills, has grown at an annual rate of 15% for the past decade.
In the same way as China’s imports of ore from Brazil have increased from the 17.5mt in 2000 — 10.5% of the total shipped in that year — to ten times that amount in 2011, the amount of steel produced in China grew from about 100mt in 2001, to 750mt last year. Estimates vary wildly as to what will happen from now on. Vale predicts that the price of the ore it exports will return to about $140–150 per tonne by the end of this year. If, on the other hand, it falls to below $120 per tonne, those mines now responsible for about a third of the ore produced in China itself, will not be able to compete. Imports of ore would then rise, rather than fall, argues Vale.
Many experts think that the amount of steel produced in China will continue to increase until it about 2020, when it will peak at about 900mt. Others suggest demand will continue to grow until 2050, when it will peak at about 1.5 billion tonnes.
While more than half of China’s 1.2 billion population now living in cities, the share will have increased to about 75% by then. This process of urbanization will ensure that demand for housing and infrastructure will continue to grow steadily.
Despite the surge in the number of cars being produced, there is still only one vehicle for every 20 Chinese, compared with one in five Brazilians, for example.
The Vale company, for one, seems to be convinced that China will continue to need more ore from now on.
Vale was recently granted outline planning permission for its second mine in the Carajas project by the ministry of the environment. The brand new ‘Serra Sul’ mine is expected to start up in 2016, two years later than first planned and to be producing and exporting up to 90mt each year soon after.
Output at the existing Serra Norte mine at Carajas will rise from the 100mt or so of last year, to about 140mt by then as well.
To allow what will eventually be 230mt of ore from Carajas to reach the port of Ponta da Madeira, at the capital of Maranhao state each year, the 890km-long railway linking the mine to the port will be completely duplicated, rather than trains having to stop at passing places, as now. A new 140km spur will be built to the new mine.
Operations at Serra Sul will be mechanized wherever possible. Forty kilometres of conveyor belts will carry the ore from workings to the processing plant and rail loaders, rather than in the huge trucks used at the Serra Norte mine.
Although truck drivers in the Para state mine do not get the $150,000 per year paid to drivers at mines in Australia, the cost of labour has been increasing fast in Brazil and Vale wants to be prepared.
Vale has 25 mines in Minas Gerais state, from where more than 200mt were exported last year, most via the Tubarao terminal in Espirito Santo state.
Experiments are being carried out into mechanizing blasting nd drilling, as well as the operation of cranes and the loading of vehicles to be driverless as well.
Ten years ago, almost 40% of the 160mt of ore shipped from Brazil, which cost $20 per tonne then, went to countries in Europe.
Being far nearer Brazil than most destinations in Asia, Europe was the premium market for Brazilian ore at that time.
Almost the same amount went to countries in Asia, notably Japan, the leading single customer at that time, which took 26mt, 16% of the total. China was in third place.
Japan is still Brazil’s second most important customer for ore, buying 37mt last year, while other countries in Asia — notably Taiwan and the Philippines — continue to be important markets as well.
With a few exceptions, shipments to countries in Europe have fallen steadily and seem unlikely to improve for the foreseeable future.
The past few years has seen the emergence of countries in the Middle East, such as Bahrain and Saudi Arabia, as well as
Egypt, able to take advantage of copious supplies of low-cost fuel in the area to make steel.
Earlier this year, 300,000 tonnes of pellets were shipped from Brazil to India, itself an ore exporting country. But costs there are high, and the Indian government wants to ensure sufficient ore remains in the country for its own steel industry. India may emerge as a major new market for Brazilian ore before long.
It takes 45 days for a ship to travel between Brazil and China, which means it costs about $45–50 to take each tonne of ore there. It only takes about 10–12 days for a ship to travel to China from Australia, so ore can be carried for $10–12 per tonne as well.
The obvious answer was for Brazil to seek to use the largest possible ships, and the solution was to order 35 Valemax vessels. Each of these monsters can carry 400,000 tonnes of ore, or a total of 1.6mt in the four round journeys such ships — many of them built in China — can make each year.
Vale had not anticipated the strong reaction from the Association of Chinese Shipowners, which persuaded the Chinese government to refuse permission for the Brazilian ships to moor at the five ports in China with the 23 metres draught needed to handle the vessels.
Vale is being forced to build transshipment facilities in Malaysia, or to offload part of a cargo onto smaller ships in the Philippines. Similar facilities have been built at Oman, as although the vessels can moor at ports in Italy and the Netherlands, they were not planned for this trade.
The Association of Chinese Shipowners, has
persuaded the Chinese government to refuse permission for the Brazilian Valemax vessels to moor at the five ports in China that offer the 23 metres draught needed.
The move by the Chinese partly largely negates the cost advantage of the new ships. However, the Brazilians claim that their ore, whose average iron content is 67%, significantly higher than the 62% average of Australian ore, will continue to be competitive, and pressure from the steel mills may force the shipowners to change their mind. [There is some suggestion that change is afoot; please see ‘Chinese softening on CVRD VLOCs?’ on p63 of this issue. Ed.]
Vale, of course is not the only company active in Brazil, although after the take over of most rivals in the 1990s and early 2000s, it is now responsible for 80% of the ore shipped.
But the Samarco Company, in which BHP is a partner, shipped 22mt via the 520km-long slurry pipeline which runs to the port of Uba last year, while Anglo American shipped 5mt from its mine in Amapa state, in the far north of the country.
The world’s largest steel company, Arcelor-Mittal says that mining and selling ore is now more profitable that making and selling steel.
Brazil’s leading steel company CSN, which now gets 35% of its profit from the sale of ore, obviously feels the same. Output at CSN’s Casa da Pedra mine in Minas Gerais totalled 20mt last year and will soon reach 50mt; there are plans to take it to 100mt before long.
Vale used to provide the Brazilian steel mills with 75% of the 60mt of ore they need each year. But with the price of Vale’s ore soaring, mills have all sought to become self-sufficient in ore. Only 50% of the ore used in Brazil now comes from Vale mines, and only 30% soon will do.
In conjunction with the LLX company, in process of building a new port at Acu, in Rio de Janeiro state, Anglo-American will soon be pumping 23mt of ore in a pipeline from its mines in Minas, Gerais to the new port, where there are plans to build a new steel mill as well.
Some other companies, notable amongst them Australia’s Cabral Resources, is also planning to open a 50mt a year capacity mine in Bahia state, which will be accessible to a new railway, to reach the sea at the port of Ilheus.
 
 
 
Bulk Connection’s manganese ore trade activities
Bulk Connections, Durban’s only bulk mineral terminal has handled a record 1.7 million tonnes of manganese ore in the past 12 months. The rapid rise in throughput is largely as a result of a major infrastructure project that has taken place during the past year, which includes the installation of several overhead conveyors, stackers and a new rotary tippler. Manganese ore is delivered by road as well as rail, stockpiled in discrete areas and loaded on board vessels using either the container method for the lumpy ore, or the conveyor system for the fine ore. Part of the upgrade was to increase the shiploading ability on the conveyor system and all conveyors are now rated for 2,000tph (tonnes per hour), which means that the target of loading a vessel in 24 hours is now realizable.
The terminal expects manganese ore throughput to double in the next two years which will go a long way to satisfying the demand for exports from South Africa. However, the rate at which the throughput increases will depend largely on the performance of Transnet Freight Rail (TFR). TFR, which is steadily increasing its performance levels and resources, is committed to assisting the industry by increasing railings to Durban and the statistics show an ever-increasing tonnage being moved through the terminal.
 
COMPANY BACKGROUND
Bulk Connections is part of the Bidvest group which operates a wide range of specialist material handling facilities in South Africa.
The operations are mainly in and around the port peripheries in strategically located facilities.
The Bidvest Group is an international services, trading and distribution company listed on the Johannesburg Stock Exchange in the Industrial – Service sector. The strategy of the group is to be invested in companies operating in the fields of distribution, service and trading.
Bulk Connections has been in business since the early 1900s. Over the years the plant has been maintained, upgraded and state of the art equipment added.
The terminal was originally operated by South African Railways and Harbours. When the Richards Bay Coal Terminal was built, the need to operate the Durban operation was questioned, and a decision was made to phase out exports. This however did not suit many small users of the terminal and after a long struggle, the Durban Coal Terminal Company was formed in September 1988. This company appointed Rennies Terminals now a part of the Bidvest group, to manage the facility on its behalf.
Since the take-over in September 1988, the facility has been continually upgraded and refurbished. Three independent loading routes are now available, storage space has been dramatically increased and the terminal is now the most effective grab discharge facility in the port.
The terminal operates 24 hours a day, seven days per week and will operate on public holidays if cargo is available.