Transnet initiates Waterberg rail studies

By: Terence Creamer, source

15th July 2014

State-owned freight logistics utility Transnet has issued tenders opening the way for formal investigations into the rail requirements to link the the coal-rich Waterberg region with domestic and export coal markets.

Transnet Capital Projects is seeking consultants to conduct a prefeasibility study into the Waterberg infrastructure and feasibility studies into rail infrastructure linking the coal-mining town of Lephalale, in Limpopo, with Ermelo, in Mpumalanga, which is a key coal-logistics junction.

The tender documents became available on July 14 and a compulsory clarification meeting has been scheduled for July 21 at Transnet’s Carlton Centre head office. Tenders need to be submitted by 12:00 on August 8.

The studies form part of a plan to connect the Waterberg coalfields, as well as those in Botswana, with export terminals in KwaZulu-Natal, as well as with State-owned power utility Eskom’s power stations, which are looking to shore up additional resources as some of its tied collieries reach maturity.

Transnet Freight Rail (TFR) CEO Siyabonga Gama indicated in June that the full Waterberg project feasibility study should be finalised by August 2015.

The Waterberg studies were being undertaken in parallel with a feasibility study into a proposed rail link through Swaziland, which is being proposed to eliminate non-coal traffic from the export channel from Mpumalanga to the Richards Bay Coal Terminal (RBCT).

A business case for the so-called ‘SwaziLink’ is scheduled to be presented to the Transnet board for approval in December.

Gama has indicated that the new link, together with the introduction of new operating models, could raise the coal-export corridor’s capacity to 120-million tons.

During Transnet’s 2013/14 financial year, export-coal volumes declined by 1% to 68.2-million tons, from 69.2-million tons in the previous year. The fall was attributed to a decline in coal prices, a nine-day power disruption at the RBCT and industrial action.

But TFR and coal exporters have been in ongoing discussions about raising the capacity of the export channel, which miners view as the main constraint to increased export volumes.

Officially, Transnet’s R307.5-billion Market Demand Strategy anticipates raising yearly coal export capacity to 98-million tons by 2019. However, Gama indicates that the SwaziLink and its 200-wagon ‘Project Shongololo’ solution have the potential to increase overall capacity to 120-million tons.

He says the Waterberg studies will interrogate a combination of a heavy-haul line and the integration of some of the existing infrastructure in the territory.

“We are also working with a number of the neighbouring countries, especially Botswana, around coal . . . its impact in terms of the Waterberg [project] will be fully analysed during the feasibility study,” Gama reports.