Transnet: To spend R7bn on Waterberg lines upgrades

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Transnet: To spend R7bn on Waterberg lines upgrades

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From Business Day, 19 January 2012. http://www.businessday.co.za/Articles/C ... ?id=162937
Transnet to spend R7bn on Waterberg lines

Transnet Freight Rail will spend R7bn over the next five years to increase capacity to move coal from the vast Waterberg coal fields to ports for export.

NICKY SMITH
Published: 2012/01/19 08:55:26 AM

TRANSNET Freight Rail, the rail unit of state-owned freight and logistics group Transnet, will spend R7bn over the next five years to increase capacity to move coal from the vast Waterberg coal fields to ports for export. The upgrades are part of the unit’s programme to increase capacity on a railway line in Limpopo for coal exports and to prepare SA’s infrastructure for the shift in coal supply from the dwindling reserves in Mpumalanga to coal-rich Limpopo to meet future demand for energy.

The Waterberg rail expansion programme has two phases, the unit’s spokesman, Mike Asefovitz, said yesterday. Work on the single line from Lephalale (Ellisras) to Ermelo has started and includes the construction of passing loops and upgrading the line to handle loads of 26 tonnes per axle from 20 tonnes previously. "Phase one consists of significant upgrades of the existing route from the Waterberg via Rustenburg and Pyramid South to Ermelo," Mr Asefovitz said. Heavier loads on the line would require sleepers of a higher quality and spaced more closely.

The investment will increase coal capacity on the line from 4-million tonnes to 23-million tonnes. This expansion does not take into account the increase in capacity for other general freight, including commodities such as chrome and granite. About 30% of this new capacity will be used to move coal to Eskom’s two new coal-fired power stations at Medupi and Matimba.

In phase two, which is not on the capital expenditure schedule for the next seven years, Transnet will spend about R31bn on a new 450km line. This will connect "into the existing network south of Thabazimbi and at Broodsnyersplaas north of Ermelo; the existing line between Thabazimbi and the Waterberg will be doubled and upgraded to 26 tonnes per axle".

SA has been struggling with rail bottlenecks for much of the past decade, causing companies producing bulk commodities such as coal and iron ore to miss out on the commodities boom driven by China’s appetite for raw materials and energy.

The Waterberg holds close to half of SA’s unexploited coal resources which are estimated to be as much as 50-billion tonnes. Consultancy Frost & Sullivan predicts domestic demand for coal will increase by 75-million tonnes a year by 2017, says Frost & Sullivan analyst Wonder Nyanjowa. Local coal production "has remained stagnant at levels around 250-million tonnes a year", he says. Existing coal production capacity cannot sustain the forecast growth in coal demand.
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