GLENCORE said it would consider restarting coal projects in South Africa as rail export capacity was restored to as much as 70 million tons (Mt) over time.
“For the first time – having had to restructure this business when it fell below 50Mt per annum – we’re now actually looking at some growth projects to bring coal on, to meet the improving rail performance,” said Murray Houston, CEO of Glencore Coal in South Africa.
Private sector efforts to recapitalise and reskill state-owned Transnet Freight Rail has resulted in an improvement in coal volumes exported over the last two years. Thermal coal exports last year totalled 57.66Mt compared to 52.08Mt in 2024, said Richards Bay Coal Terminal, the privately-owned export terminal in January. Coal exports hit a 40-year low in 2023 of 47.21Mt when TFR failures were at their worst.
RBCT CEO Alan Waller said in July that exports to end-June totalled 30Mt, raising expectations 60Mt were within reach for the year, increasing to perhaps 62Mt. TFR suffered a derailment in June but its recovery was heartening. “Transnet immediately hit their straps again which is unusual and encouraging,” said Waller.
All this points to an important sea-change for coal miners provided TFR continues improving its volumes. “Looking out over the next four to five years, I think this will move back towards 70Mt. Whether we get back to 80Mt, I think that’s still a question, but we’re starting to walk, if not run yet.”
Transnet has taken steps to open its rail network to private partnerships, including investment in maintenance. It last year rolled out an infrastructure management company known as TRIM that allows for independent operators on the network. It has targeted 20Mt of additional capacity across all commodities.
Houston said there had been “a significant change” on both the infrastructure and the rolling stock. Transnet has taken delivery of 105 brand-new Class 23E locomotives for the coal line so that traction power is no longer a problem. “Wagons aren’t either, at the current rates probably until we’re north of 70Mt per annum,” he said.
As a result, business conditions are conducive towards expansion rather than contraction and at a time when thermal coal prices are supported by energy shortages in Asia. “We do have a number of projects that we’ve had to slow down, given where things stood for the better part of three to four years,” said Houston.
Asked how much volume could be brought back by Glencore, he said: “We’d have to bring those projects back to feasibility and compete for capital. It depends on when we bring them forward. We’d have to spend capital if it goes back to between 70Mt to 80Mt.
“Effectively, for every five million tons of improved rail capacity, we need a margin in excess of about a million tons of excess capacity — so it’s not just a case of squeezing out a few extra tonnes here and there,” he said.
