Sandro to build terminal to ship iron ore and discarded coal
Indian coal trader plans to list on JSE
January 31, 2006
By Antony Sguazzin
Johannesburg - Sandro Power Supply, an Indian power generating and coal trading company, plans to list on the JSE and to build a terminal to ship coal and iron ore to India and China.
The shares will be sold in Sandro's Osho South Africa Coal Mining unit.
Osho plans to buy magnetite, a type of iron ore, from Palabora Mining and Foskor. It will also buy steam coal and anthracite.
The materials are often mined as a by-product and stockpiled because they are too far away from rail or port facilities.
"These discards can be consumed comfortably by Indian industry," Sandro said in a copy of a presentation due to be given to the McCloskey coal conference in Cape Town yesterday.
Sandro, a closely held company based in Mumbai, is seeking to take advantage of growing demand from China and India for commodities such as iron ore and coal. The move comes at a time when South Africa's is keen to diversify its export markets away from Europe.
Osho's plan includes the construction of a terminal to export as much as 15 million tons of coal a year from South Africa. Sandro did not say where it plans to build the terminal.
It would compete with Richards Bay, which shipped about 69 million tons in 2005, and smaller terminals at Durban and Maputo in Mozambique. Palabora, which is controlled by the Rio Tinto Group and Anglo American, is seeking buyers for a 241 million ton stockpile of magnetite produced as a by-product of copper mining at its mine in the east of South Africa.
Foskor, a government-owned phosphate producer, has a 55 million ton stockpile at its adjacent operations. Sandro plans to build a pipeline that would transport 10 million tons of the ore annually to ports.
The company estimated discarded stockpiles of steam coal in South African at 50 million tons and those of anthracite, a type of coal used in metal plants, at 10 million tons. It also assessed stockpiles of iron ore pellets and iron flux at 60 million tons.
Four capesize ships and six panamax vessels would be bought for the project.
Financing would be sought from investors and South African banks.
- Bloomberg
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