South African Coega port plan faces cost concerns
South Africa's largest iron ore producer, Kumba Resources, is involved in a debate regarding the upgrading of Coega's Ngqura port. Kumba, which has been planning to develop the rich iron ore reserves in the Northern Cape area of South Africa, has been in plans to develop the Coega port in order to accomodate the increased iron ore shipments. However, the high cost of infrastructure at the Coega port as well as the high cost of expansion plans already in action at South Africa's primary iron ore export port, Saldanha are forcing Kumba to reconsider the feasibility of the port. The Saldanha expansion is expected to boost the port's current capacity of 29 million tons per year to 41 million tons. The Eastern Cape port is currently being considered as an alternative port terminal for the Northern Cape's iron ore assets. Officials from Kumba report that the key to the implementation of the port development plans is the high demand from China. If this year's 18% hikes in contract prices can be maintained next year, officials say that the expansion plans are more forceful. For now, however, they are maintaining a wait-and-see outlook.