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Coal transport to cost more

Dec 11 2009 08:47

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Cape Town - An expansion of South Africa's coal rail line leading to the export terminal at Richards Bay beyond 81 million tonnes will have an impact on applicable tariffs, a minister said on Thursday.

South African logistics group Transnet has been widely criticised for failing to bring all the coal to the port, partly due to derailments and delays on its lines.

Public Enterprises Minister Barbara Hogan, who oversees Transnet, said the group and industry were investigating ways to fast-track the line's expansion to be able to handle 81 million tonnes in the short term and to 91 million in the long-term.

Their goal is to match an expansion at the Richards Bay Coal Terminal (RBCT), due to raise capacity to 91 million tonnes and expected to be completed this quarter.

In 2008, the terminal exported only 61.8 million tonnes of coal, mainly to Asia and Europe, although coal miners claim the figure could have been higher if Transnet had performed better.

"Any expansion (on the rail line) beyond 81 million tonnes per year is expected to come at a substantial cost which in turn will impact on the applicable tariff," Hogan said in a written reply to a parliamentary question. She did not elaborate on the likely tariff impact.

Transnet's freight rail arm (TFR) is investing heavily to upgrade the railway infrastructure to cope with the increased exports, but has said it will refuse to invest more as long as returns are not guaranteed by long-term deals.

RBCT, which limits access to the port to its shareholders, said junior miners would get port allocation in line with TRF's upgrades on the lines.

Hogan said Transnet would be able to exploit the expansion opportunities once the question of tariffs had been resolved.

"And the willingness of coal customers to contract at the resultant tariff on a take or pay basis," she added.

Hogan said Transnet was already providing a port solution limited to 3 million tonnes per year through the Richards Bay Dry Bulk and Multi-Purpose terminals for some coal miners that do not have access to the RBCT.

- Reuters

 
 
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