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Transnet may expand iron ore line

Iron ore for export
on the Transnet line
Johannesburg, South Africa — MININGREVIEW.COM — 11 November 2010 – South African logistics group Transnet has revealed that it is studying a possible expansion plan which would enable its ore export line to transport up to 80Mtpa of iron ore and 12Mtpa of manganese per year.
The group’s freight unit, Transnet Freight Rail (TFR), is currently investing in a project to raise capacity on the iron ore line from 47Mtpa to 60Mtpa by 2012. Reuters reports that South Africa’s commodity exports have been slowed by transport bottlenecks and a lack of investment, which have hurt growth in the continent’s largest economy.

“Industry has expressed a desire to increase the capacity of iron ore to 80MTPA, and a joint preliminary feasibility study with industry should be presented in two months time,” TFR said in an emailed response to questions from Reuters.

State-owned Transnet has embarked on a massive infrastructure programme to upgrade its rail network for iron ore, coal and fuel. It said last month that its planned investment over the next five years could rise from a previously estimated R93 billion to R100 billion.

TFR is also upgrading the coal line leading to the export terminal at Richards Bay, confident it can raise its annual figure for the financial year to the end of March well beyond the 61.7Mt it transported in its 2009 financial year.

“It is difficult to predict exactly what the final tonnage for the year will be. However, we expect to end the year in the 65 to 67Mt range,” the unit said.

TFR is investing R15 billion rand to raise capacity on the coal export line to 81Mtpa by 2014, adding around 3Mt of capacity each year. But the target falls short of the expanded capacity at the Richards Bay Coal Terminal of 91Mt, leading to criticism by coal exporters.

TFR said it had yet to decide whether to invest in an expansion beyond the 81Mt mark.
“While we are confident that there is a requirement for capacity above 81Mtpa, it is very difficult to say with conviction what that number will be in the 5 to 20-year time frame, which is the time frame we need to look at to recoup our capital,” TFR explained.