[miningmx.com] — OPTIMUM Coal CEO Mike Teke said Transnet Freight Rail and the country’s coal producers should get together to resolve problems related to the underutilisation of Richards Bay Coal Terminal (RBCT), before South Africa missed out on the coal market upturn for a second time.
RBCT has an export capacity of 91 million tonnes, but of this less than 65 million tonnes is used, while the coal price for Richards Bay coal is currently around $123/tonne.
Transnet is able to transport, at most, 70 million tonnes a year to the port and it is busy approving expansion plans to increase the rail line’s carrying capacity to 81million tonnes by 2015.
The current estimated cost of the expansions is R21bn, but this is dependent on government approval, a Transnet spokesperson said on Sunday.
Still, 81 million tonnes are 10 million tonnes less than the existing export capacity.
The coal producers and Transnet should put their heads together and discuss ways in which they can help Transnet speed up expansion of the carrying capacity of the lines, Teke told students at Wits’s engineering faculty in Johannesburg.
Current capital expenditure provided only for buying trucks and locomotives.
While 110 new locomotives have to be bought for this route, the bottleneck on the rail line from Ogies in Mpumalanga to Richards Bay is at the Midvaal Tunnel, where only one train can go through at a time.
The tunnel needs to be widened to resolve the problem, said Teke.
At the same time Teke was giving delivering his speech, Brian Molefe, who had been appointed chief executive of Transnet earlier this year, announced plans for manufacturing rail equipment like trucks in South Africa for export to other African countries.
Transnet has, on a very small scale, already sold railway trucks to countries in West Africa and the Democratic Republic of Congo. The quantity is small, but the intention is to accelerate the pace and the scope dramatically, Molefe said at a Cape Town harbour party to celebrate progress with expansions to the container port terminal.
Anoj Singh, Transnet’s acting chief financial officer, said the Cape Town harbour project was worth R4.2bn, R2.4bn of which had already been spent. Over the next five years another R5.4bn would be spent on the Cape Town harbour.
Transnet’s capital expansion programme for the next five years amounts to some R110bn. Just under R30bn will be spent on ports and port equipment, R23bn on new locomotives and R17.3bn on new railway trucks.
– Sake24
