The drop from 48Mt in 2008 is a result of the company’s sale of the Optimum coal mine under the government-sponsored black economic empowerment arrangement.
Reported by Reuters, on the sidelines of a mining conference in Cape Town, BHP’s vice president for South African coal operations Wilco Uys said this year’s forecast was 34Mt, but he said the company was on track to boost production by 2011 as a result of the $US1.4 billion investment in upgrading sites.
Breaking it down, some $50 million will be spent on the Klipspruit project joint venture with 50% stakeholder Anglo Coal while another $975 million is designated for expanding the Douglas Middleburg operation.
According to the report, Uys said the upgrade of the Douglas Middleburg should be finished in the second half of 2010, with expected 12-14Mt per annum output and a mine life to 2034, while the plant at Klipspruit should ramp up to 8Mtpa by 2011 from its current 4.2Mtpa capacity.
In a commodities update this morning, Macquarie analysts said the 2009 production decline from BHP would not signal a fall in South African exports, which the analysts expect to be about 65Mt, after only 62Mt last year.
“In particular, the export rail bottleneck in South Africa is set to be relieved as new rolling stock is brought into the system in March,” Macquarie said.
“However, January shipments were a reminder of how fragile South Africa's export infrastructure can be, after a major derailment limited rail volumes to the Richards Bay export terminal to only 4.96 million tonnes [58.4Mt annualised].
“Shipments were only 4.11 million tonnes [48.4Mt annualised].”