The National Ports Authority and representatives of Richards Bay Coal Terminal will meet again today to discuss issues preventing the authority giving the go-ahead for the R700m Phase V expansion at the Richards Bay Coal Terminal.

Disagreements on how much of the privately held Richards Bay Coal Terminal capacity should be made available to nonshareholders in the terminal has become a major stumbling block for the authority to authorise the expansion.

The state-owned authority is keen to secure access to the export market for SA's small-scale coal miners, and as part of this is looking to secure export channels for black economic empowerment parties in the coal industry.

Sources say the authority wants Richards Bay Coal Terminal to give up 4-million tons of its existing 72million-ton coal export capacity to nonshareholders. Richards Bay Coal Terminal wants to give up about 1million tons of capacity.

A few industry sources have suggested that if the stalemate regarding the development of Phase V continues for much longer, the project might be abandoned.

This would threaten the proposed development of the Kalbasfontein mine, a joint venture between Kumba Resources and Eyesizwe, and the development of a new coal mine proposed by Eskom.

The R280m Kumba/Eyesizwe deal to develop Kumba's Kalbasfontein coal reserves hinges on the go-ahead for the Phase Five expansion at the terminal.

"If Phase V does not take place it will damage the SA coal industry. Not just opportunities for small companies that may or may not come into the market, but it threatens the development of bigger mines that are depending on the expansion for export," said a coal industry source.

A study backed by government has shown that there is not sufficient production by smaller-scale producers of the quality of coal required for the export market.

Sources have said it is not even clear whether at the moment there would be enough coal of the right quality to use up 1-million tons a year of coal export capacity.

There is a belief that the ports authority is basing its demands for access to 4-million tons on the fact that last year the seven shareholders at the terminal exported about 68million tons of coal. This left 4- million tons of unutilised capacity.

This disagreement about access to export capacity, combined with increases in Spoornet coal freight prices, is casting a shadow of uncertainty over the SA coal industry. Increases in freight rates to Richards Bay Coal Terminal by Coal Link have not been as high as those imposed by Spoornet for the transport of coal to Durban Coal Terminal and Matola in Mozambique.

Freight costs rose about 35% this year and are expected to increase by the same amount next year.

This is undermining the viability of Durban Coal Terminal and there are suggestions that the terminal's owner, Bidfreight, which is part of Bidvest, is considering scrapping coal exports.

Freight price increases and the stronger rand have meant that the quantities of unsized coal (mainly energy coal) being channelled through Durban are falling as margins on energy coal disappear.

The terminal is now considering the possibility of focusing on the export of other bulk commodities.

To make this change, though, it would first need to get the approval of the ports authority.