Transnet eying 80 million tonnes on Waterberg coal line

Saturday, 08 Oct 2011

According to the head of the freight rail unit at logistics group Transnet, a planned rail link to the Waterberg coal fields could eventually handle up to 80 million tonnes of coal a year if there is enough demand.

The Waterberg area in the northern Limpopo province is expected to become the country next coal hub as reserves in the Witbank area near depletion.

Coal producers have been slow to build new mines in Waterberg because of a lack of infrastructure linking it with export terminals on the coast, but Mr Siyabonga Gama CEO of Transnet Freight Rail said the rail project was on.

He said that "For all intents and purposes, that project is going ahead, adding that the line would be expanded in phases. The idea is that the Waterberg line will be a heavy haul line. We have a plan that will see the Waterberg line going to about 80 million tonnes if there was demand."

The capacity of an existing rail line in the area is limited to around 4 million tonnes per year. Mr Gama said a feasibility study on the expansion of the line will be completed by April and will determine the exact dates and costs of the project.

The 464 kilometers line would connect with an existing line at Ermelo in Witbank which already links to the main coal export terminal at Richards Bay. Including wagons, rolling stock and other necessary infrastructure, cost estimates for the line are around R37bn.

Mr Gama said the main Witbank rail line to the Richards Bay Coal Terminal might also be expanded beyond the 81 million tonnes Transnet is hoping to reach by 2015. The company managed to carry only 63 million tonnes to RBCT last year.

He said that "We intend to go to 97 million tonnes, and studies indicate we could even go to about 120 million tonnes of coal being handled on that line, although there were no firm timelines yet for that target.”

He added that "Over the next 12 years the rail system will need between R350bn and R400bn of investment. He also said if we could get 30% of that investment from the private sector and that would be good progress."

The lines have suffered from decades of underinvestment, but recent improvements have been paying off. Mr Gama said the firm should be able to meet miners demands within three to four years. He said that Transnet currently transports coal at a record rate of 1.65 million tonnes a week and should meet its target of carrying 70 million tonnes of coal in this financial year.

Mr Gama said a plan for how private players can participate in infrastructure would be completed by early next year. He added that while the private sector could invest in wagons, the running of lines would remain in state hands and dismissed arguments that South Africa should emulate countries where private players own and run part of the railway network.

He also said "You have to run them (the railway lines) as an integrated and a holistic network to realize the benefits of efficiencies and the benefits of investments, adding that so far concrete commitments from private investors have been limited.”

He added that "A lot of players say that they want to get involved but when we start flashing out the details, the amounts some of them we never see again."

Mr Gama dismissed criticism of Transnet's performance on the line leading to Mozambique port at Maputo and said the firm was ahead of demand on that corridor and would transport 4 million tonnes of coal on that route this financial year more than double what it carried last year.

(sourced from miningmx)