TFR initiates work on Waterberg coal field rail expansion

Transnet Freight Rail (TFR) has started work on the ground to expand rail capacity for coal from the Waterberg coal region in the Limpopo province. According to mining companies, it’s a move that will be key to unlocking the region’s potential for mining the commodity. In August, Exxaro executives told the media that it was optimistic about things starting to happen on the ground as TFR progressed its plans to expand the rail network from Waterberg. The inadequate rail network has been blamed for holding back mining development in the area. This in turn has sparked worries over the national supply of coal to Eskom in the near future. Eskom hopes that mining in the Waterberg will start sooner rather than later to ensure coal supply to the power utility’s coal-hungry power stations, but industry fears that the new coal capacity from the region will be unlocked only when it is too late for Eskom. This due to a lack of urgency from Transnet’s side, participants feel, to expand the Waterberg rail links. It is estimated that Eskom will start to have a shortage of coal supply of around 15 million tpy from 2015. “This is a national crisis,” one executive at a large coal producer told FTW. “We are on the brink of a total disaster, and we feel that the matter is being addressed with less-than-adequate urgency.” At the moment Exxaro takes up most of the 4 million tpy of capacity on the Waterberg line with production from its Grootgeluk mine in the Lephalale area in Limpopo, with the remainder of the line’s capacity spoken for by Kumba Iron Ore’s Thabazimbi iron ore mine. Exxaro’s Thabametsi mine in Waterberg is set to produce 3.8m tpy of coal from 2016/17 to be supplied to a 300 MW installation that Exxaro is building with French energy company, GDF Suez, as part of the South African government’s Renewable Energy Independent Power Producers Procurement Programme. However, Exxaro has indicated in the past that its expansion of Thabametsi is constrained by the inadequate transport for coal from the region. The mine can produce from 3m tpy up to 30m tpy. In this one company only, there is massive scope for expanding the mine’s production. Other companies are faced with the same constraints. Waterberg Coal Company will produce 10 million tpy only in its first phase. Allowing rail capacity, the mine could expand beyond that. However, Exxaro executive general manager of coal, Mxolisi Mgojo, said in August that TFR had started work on the ground. He said that TFR would add 2.4m tpy of coal export rail capacity to the existing 4m tpy on the Waterberg line by the end of this year. A further 6.2m tpy of rail capacity will be added by June 2014. Further increments are to be added to the line until 23 million tonnes have been added by 2018 or 2019, according to Australian junior miner Waterberg Coal Company, which is set to start mine production of 10 million tpy of coal for Eskom by 2015. The junior’s ceo , Stephen Miller, said that Transnet could immediately push up capacity to 7 million tpy by “tweaking” the existing configuration of the rail line. Miller said this would be accomplished by extending existing loops and adding new ones. The Thabazimbi and Lephalale section is to be electrified, while the arrivals and departure yard at Lephalale is to be upgraded to handle 100-wagon trains, he said. TFR is also set to upgrade the power supply en route, and to convert to 26-tonneaxle loads, Miller added. INSERT 15m tpy Eskom’s estimated coal shortage by 2015