Johannesburg, South Africa — MININGREVIEW.COM — 10 May 2011 – Optimum Coal CEO Mike Teke has appealed to Transnet Freight Rail and the country’s coal producers to get together to resolve problems related to the under-utilisation of Richards Bay Coal Terminal (RBCT), before South Africa misses out on the coal market upturn for a second time.
RBCT has an export capacity of 91Mt, but of this less than 65Mt is used, while the coal price for Richards Bay coal is currently around US$123/t.
Transnet is able to transport, at most, 70Mtpa to the port and it is busy approving expansion plans to increase the rail line’s carrying capacity to 81Mt by 2015.
The current estimated cost of the expansions is R21 billion, but this is dependent on government approval, a Transnet spokesperson said.
Still, 81Mt is 10Mt 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 the Wits engineering faculty in Johannesburg.
Current capital expenditure provided only for buying trucks and locomotives, he added.
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 that Teke was delivering his speech, Brian Molefe, who was 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.
Transnet acting chief financial officer Anoj Singh said the Cape Town harbour project was worth R4.2 billion, of which R2.4 billion had already been spent. Over the next five years another R5.4 billion would be spent on the Cape Town harbour.
Transnet’s capital expansion programme for the next five years amounts to some R110 billion. Just under R30 billion will be spent on ports and port equipment, R23 billion on new locomotives and R17.3 billion on new railway trucks.