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Issue #591

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Air Cargo Quarterly

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2014 Media Kit

Transnet mulls more iron ore line expansion

By: | at 07:00 PM | Intermodal  

South African logistics group Transnet said it was studying an expansion of its ore export line to transport up to 80 million tonnes of iron ore and 12 million tons of manganese per year.

Transnet Freight Rail (TFR), the group’s freight unit, is currently investing in raising capacity on the iron ore line to 60 million tons by 2012 from 47 million tons.

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 capacity of iron ore to 80 million tonnes per year and a preliminary joint feasibility study with industry ... should be presented in two months time,” TFR said in an emailed response to questions.

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 its planned investment over the next five years could rise to 100 billion rand ($14.63 billion) from a previously estimated 93 billion.

TFR is upgrading the coal line leading to the export terminal at Richards Bay, confident it can raise its annual figure for the year to the end of March well beyond the 61.7 million tonnes it transported in its 2009 financial year. Transnet’s financial year runs from April to the end of March.

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

TFR is investing 15 billion rand to raise capacity on the coal export line to 81 million tonnes per year by 2014, by adding around 3 million tons of capacity each year.

The target falls short of the expanded capacity at the Richards Bay Coal Terminal of 91 million tonnes, leading to criticism by coal exporters.

TFR said it had yet to decide whether to invest in an expansion beyond the 81 million tons.

“While we are confident that there is a requirement for capacity above 81 million tonnes per annum, it is very difficult to say with conviction what that number will be in the 5-20 year time frame, which is the time frame we need to look at to recoup our capital,” TFR said.

South Africa is a major supplier of coal to Europe and India, and increasingly China. Companies in the coal sector include Anglo American , Xstrata , Optimum Coal and Exxaro.

South Africa’s Kumba Iron Ore , a unit of Anglo American, is the world’s tenth largest supplier of iron ore. (Reuters)