PERTH (Reuters) - Taiwan's Formosa Plastics Group is looking to buy two South African thermal coal cargoes for delivery in the fourth-quarter, having already imported 1.2 million tonnes from the country this year. Trade sources said on Monday that Formosa was seeking a cape-sized cargo each for delivery in the months of November and December, as South African coal prices are now cheaper than Australian supplies by about $18 a tonne. "They have their own vessels so buying spot cargoes from South Africa is the cheapest option on a landed basis," said an industry source with knowledge of the deals. The source added that a trading firm has offered November and December cargoes to Formosa at around $66 a tonne. Formosa has been buying one cape-sized South African coal cargo on a spot basis every month since March and has so far booked shipments until October, bringing total purchases so far this year to 1.2 million tonnes, or eight cape-sized shipments, said two trade sources. On a landed basis, the conglomerate has been able to secure South African supplies at about $80 a tonne; paying about $63-$65 a tonne on a free-on-board (FOB) basis from South Africa's Richards Bay coal port, while freight rates for the route are at around $16 a tonne. "That's a huge discount compared to bringing in Australian coal," said a trader. Thermal coal prices in South Africa have been trading at a discount to Australian material most of this year as demand from Europe -- the country's major market -- shrank amid falling industrial power consumption. South African coal prices stood at $60.67 a tonne on globalCOAL's RB index on Friday, while Australian coal prices were at $78.04. The indices are based on coal with similar qualities. South African coal exports to Asia excluding India and Pakistan in January to June were around 1.4 million tonnes, a slight rise from 2008 levels, with China having bought about 150,000 tonnes during this period. | 
