TRF derailment halts coal exports

Johannesburg Stock Exchange-listed (JSE) Coal of Africa (CoAL) has declared force majeure on all of its coal exports after a Transnet Freight Rail (TFR) goods train derailed on the rail line that links South Africa with the Matola port near Maputo, Mozambique. The coal miner has been notified by TFR that 10 wagons derailed on the Maputo corridor on February 18, and that it will take six to seven weeks to clear the blockade. Until then, CoAL said, it would have to stockpile its coal for export. “All of our coal from [the] Vele [mine] is earmarked for export,” Sakhile Ndlovu, investor relations manager at CoAL, told FTW. “For us there is no other option but to stockpile our product for export.” She noted that Vele had achieved its stockpile capacity, and would be suspending production at the mine until further notice. “At our Mooiplaats and Woestalleen operations we will continue to produce until we reach our stockpile capacity there,” Ndlovu said. CoAL will have its force majeure in place initially for seven weeks, but will advise its shareholders of any changes as and when the company receives more news on Transnet’s progress in clearing the line. In the second quarter of its current financial year, CoAL reported a total run of mine production of 1.153 million tonnes, with 194 495 tonnes (16.86%) produced at Vele Colliery. The company exported for sale 411 297 tonnes. Palabora Mining Company, owned by Rio Tinto, is another company affected by the accident, FTW understands. Palabora moves magnetite (iron ore) and vermiculite on the Maputo corridor, but it is unclear whether the blockade will have an effect on Palabora’s business – and the company did not respond to various requests for information at the time of publishing. “We don’t have any other options but rail to ship coal,” Ndlovu from CoAL said. The company said it would implement measures at all operations to mitigate the commercial and operational impact of the force majeure. Even while Vele production is suspended to save costs, essential services at the colliery will continue. The company has started “a buffer contingency plan” that will enable production to restart within 24 hours of Transnet resuming operations on the Matola corridor, CoAL said. Transnet has been exploring alternative routes to the Matola port, but has to date been unsuccessful, FTW understands. One option could be to divert traffic through Swaziland on the Goba line, but the railway here can only handle limited volumes.