Facing a softening coal market and experiencing a nearly 40 per cent drop in volume year-over-year through the first 10 months of 2014, Ridley Terminals Inc. announced this week it would be delaying its planned expansion.
The company is in the midst of an expansion that was to double its capacity from 12 million tonnes to 24 million tonnes, but RTI chairman Byng Giraud says those plans will now be put on hold once the terminal reaches a capacity of 18 million tonnes.
“We don’t anticipate that we’ll need more than those 18 million tonnes a year for the next five years or so. But to say it’s all suspended is not exactly true. We need to be flexible should coal prices recover. Should things go better, we could ramp the expansion back up,” he said in an interview with the Globe and Mail, noting the terminal is not in a poor financial situation.
“This is still a profit-making and successful operation. Coal prices have gone down, and you have to reassess if it is the best time to unload the asset. You have to get the best value for the taxpayer.”
The announcement comes after an October that saw volumes drop 49.44 per cent compared to last October, driven in part by the fact the terminal shipped no thermal coal while shipping 335,112 tonnes the previous year.