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Johannesburg-listed logistics operator Grindrod has unveiled plans to triple capacity at its dry bulk port terminals in Mozambique in response to rising demand for coal exports from neighbouring SA.

According to a statement released by the Maputo Port Development Company, the extension is projected to boost SA’s mining exports on a year-on-year basis, increase volume exports by existing port users, and promote port access to new users.

The MPDC, in which Grindrod is a major shareholder alongside the government of Mozambique, said the capacity of the terminal at the country’s biggest port in Maputo will grow to 4.5-million tonnes annually by the end of June from 1.5-million tonnes.

At its 65%-held Matola coal terminal, capacity will increase to 12-million tonnes yearly from the current 7.3-million tonnes in the short- to medium-term, and up to 20-million tonnes in the long term.

“The African supply chains are full, so expanding our footprint in the terminals we are already invested in will provide miners greater access to global markets,” CEO Xolani Mbambo told Business Day on Tuesday.

Maputo is “ideally situated as a gateway port from Africa to the world,” hence the company was invested in Sub-Saharan Africa, including existing investments in the Port of Maputo — dry bulk terminals in the main port, and Matola, he said.

Expansion of Maputo’s capacity is under way and a feasibility study for the planned expansion project at Matola has already been completed.  

Mbambo would not comment on the capital injection, citing “a closed period”.   

The augmentation comes as global demand for coal increases as countries reopen their economies and continue to recover from the Covid-19 pandemic. Coal prices are reaching record highs due to the major surge in coal demand worldwide.

According to Bloomberg, the increase in coal deliveries for export from SA is behind Grindod’s plans to triple capacity at its dry bulk port.

Research by African mining sector specialists Afriforesight shows the outlook for SA’s coal industry remains generally positive despite increasing pressure for countries to reduce their reliance on fossil fuels and cut carbon emissions.

Mineral resources and energy minister Gwede Mantashe, who has faced criticism in the past over his emphasis on coal, has said developing countries should not base their energy transition on what works in the world’s advanced economies and called on coal miners to not “be shy to fight for SA’s national interests on coal mining and coal power stations”.

Coal, the third-largest employer in the mining industry, contributed 21% — or R130.57bn — of total mining revenue in 2020.

Moreover, incessant bottlenecks and backlogs at SA’s Durban port have sent local mining companies searching for alternatives to export their goods. Trucks carrying goods over the SA and Mozambique border also face major delays, stranded sometimes for days in slow-moving queues.  

Grindrod has been working towards expanding its operations. In December a Cape size vessel, about the length of three soccer fields, sailed from Matola terminal carrying the biggest shipment in the port’s history- a parcel of 147,545 tonnes of magnetite destined for China. 

“Investment in channel dredging, paired with the rehabilitation and deepening of TCM’s berth, has equipped the port to accommodate bigger vessels and become more competitive in the region,” added Mbambo.

Major shareholders at Grindrod include Remgro, PSG Asset Management , the Public Investment Corporation , and the Government Employees Pension Fund.

Cheryl Carolus was appointed to the board as an independent non-executive director in October and will be appointed chairperson of the board on the retirement of the current chair, Mike Hankinson, from May 25 .

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