By Jacqueline Cowhig
MOSCOW, March 27 (Reuters) – Energy trader Vitol is taking a
9.1 percent stake in South Africa miner CIC Energy Group as part
of its strategy to develop a substantial coal business for the
long-term, a Vitol executive told Reuters on Tuesday.
Falling coal qualities in South Africa’s Mpumalanga coal
heartland and a lack of access to export capacity have forced
coal players to look to the north of the country, to Botswana,
the Waterberg and across the border to largely-undeveloped
Mozambique for investments, industry sources said.
“This (the CIC deal) is about Vitol securing access to
large-scale exports in the future,” the exectuive said, speaking
on condition of anonymity.
CIC has three coal blocks in development, one for domestic
coal and two for export.
Vitol will market 60 percent of any future export grade
coal, he said.
“Vitol is trying to develop an upstream strategy to support
the Maputo terminal (in which it bought a stake) and to increase
it,” he said. “We see the future of South African coal from
greenfield areas, the Waterberg, Botswana and beyond.”
CIC wants to build rail lines to new or expandable points of
export, which could go through Botswana, Zimbabwe and Mozambique
but is more likely to run from Witbank to the Waterberg and then
east to Maputo.
“This is not Vitol saying we don’t like South African risk,
most coal will go through South African transport systems such
as the expanded Transnet line through the Waterberg,” he added.
Continued…
