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Commodity lines to receive boost from R300bn Transnet plan

Johannesburg:  About one-third, or around R100-billion of Transnet’s R300-billion, seven-year rolling capital investment programme will be directed towards the upgrade and expansion of South Africa’s key commodity export corridors. It was confirmed on Tuesday that some R50-billion had been set aside for the Richards Bay coal corridor, including the opening up of export capacity from the coal-rich Waterberg region, in the Limpopo province.

A further R25.9-billion would be invested in the so-called ‘South Corridor’ linking the harbours at East London, Ngqura and Port Elizabeth to the resources-rich hinterland. The investment included the development of new manganese terminals at the new deep-water harbour of Ngqura, as well as a strengthening of the rail line between Sishen and Ngqura for the transport of manganese.

The investment in the coal channel should increase coal volumes by 44%, from 68-million tons last year to 98-million tons, by 2018/19, which would be above the 92-million-ton-a-year nameplate capacity for the privately owned Richards Bay Coal Terminal, in KwaZulu-Natal.

It would also entail the staged opening of the Waterberg coalfields to supply coal for domestic power generation by Eskom, as well as to coal-hungry markets in Asia and Europe.

CE Brian Molefe said the initial focus was on decongesting the Ermelo-Richards Bay line by investing in a general-freight link through Swaziland. Thereafter, a project would be implemented to bypass the Rustenburg/Brits area (where clay soil conditions would be an impediment to heavy-haul operations) so as to link the Waterberg miners with the coal corridor.

He anticipated that the Swaziland loop could be operational by 2015/16 and that the Rustenburg bypass should be completed during 2016/17.

Moving domestic coal flows from road to rail was another key priority, with Transnet’s Market Demand Strategy (MDS) budgeting for a 305% increase in volumes, from 7.3-million tons in 2011/12 to 29.6-million tons by 2018/19.

The State-owned company would also spend R28.6-billion on the Sishen-Saldanha iron-ore corridor between 2012/13 and 2018/19.

The investment in the rail corridor and the port should raise the capacity of the export channel, which traverses the Northern Cape and Western Cape provinces, by 57%, from 53-million tons to 83-million tons over the seven-year period.

The MDS also included a plan to raise domestic iron-ore volumes by 134%, from 7.7-million tons last year, to 18-million tons by the end of the seven-year period.

The relocation of the manganese export terminal from Port Elizabeth to Ngqura, meanwhile, would enable Transnet to increase volumes from 4.8-million tons in 2011/12 to 11.7-million tons by 2018/19. However, it had plans to grow volumes to beyond 16-million tons over the longer term.

The investments, Molefe said, could help transform its rail unit into the fifth-biggest rail utility globally. They could also consolidate South Africa’s position as a key thermal coal exporter to China and Europe and as the fourth-largest exporter of iron-ore to China and guarantee its position as the world’s leading exporter of manganese.

“It has been said over the last couple of years that a big disappointment in the South African economy was Transnet’s inability to carry the coal it was supposed to carry to the Port of Richards Bay [and] to carry the iron-ore to the Port of Saldanha.

“We want to restore that confidence,” Molefe said in an interview with Mining Weekly Online. The volume turnaround during 2011/12 had already helped begin that process, he averred.

During the year, 68-million tons of coal was transported on the Richards Bay channel, and 53-million tons of iron-ore along the Sishen-Saldanha corridor, while the general freight business, which rails a number other commodities along with containers, moved 80-million tons. It was also the first time in the group’s history that more than 200-million tons were transported across all business segments.

“The [miners] have received this very positively and have even been surprised in certain instances,” Molefe said, adding that the group planned to sustain that growth momentum over the coming seven-year period.

11 April 2012
Terence Creamer
Mining Weekly
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