- Title: FOCUS-South African coal miners struggle with deteriorating rail infrastructure
- Date: 3rd May 2022
- Summary: BRONKHORSTSPRUIT, SOUTH AFRICA (RECENT) (REUTERS) VARIOUS DRONE SHOTS OF TRANSNET TRAIN CARRYING COAL TRAIN STATION OPERATOR MONITORING TRAINS TRAIN WAGONS CARRYING COAL SIGN WRITTEN (English): BRONKHORSTSPRUIT SHOVEL LOADING COAL INTO TRUCK / HEAP OF COAL VARIOUS OF SHOVEL DRIVER LOADING COAL INTO TRUCK TRUCKS CARRYING COAL DRIVING OUT OF MINE FOOTSTEPS KHANYE COLLIERTY MINE MANAGER, CLIFFORD HALLATT, WALKING ON TOP OF COAL/LOOKING AT MINE ACTIVITY HEAP OF COAL/ SHOVEL LOADING COAL INTO TRUCK (SOUNDBITE) (English) KHANYE COLLIERTY MINE MANAGER, CLIFFORD HALLATT, SAYING: “April, March of 2021, we started experiencing issues with Transnet, availability of their trains, them being able to give us sufficient amount of trains required to move our product from the mines, from this mine and the other mines within the Menar group. We then decided to start transporting to Richards Bay specifically with trucks because at that point there was a turn in the market, the coal price increased quite significantly.†VARIOUS OF WET COAL TRUCKS DRIVING OUT OF MINE / SHOVEL LOADING MORE COAL (SOUNDBITE) (English) KHANYE COLLIERTY MINE MANAGER, CLIFFORD HALLATT, SAYING: “We were paying about 210 rands a ton via rail from Bronkhorstspruit to the port. At that point in time, trucking is about 3 times the amount, currently we’re paying closer to 4 times due to the increase in fuel price. Also the demand in trucks increased quite significantly because the coal holders saw that there’s a gap in the market, there’s an opportunity and obviously they pushed up their prices.†RAIL TRACKS COVERED IN COAL DUST VARIOUS OF TRANSNET TRAIN PREPARING TO TRANSPORT COAL
- Embargoed: 17th May 2022 11:42
- Keywords: Ukraine coal mining force majeure khanye collierty mine rising prices transnet freight rail
- Location: BRONKHORSTSPRUIT AND JOHANNESBURG, SOUTH AFRICA
- City: BRONKHORSTSPRUIT AND JOHANNESBURG, SOUTH AFRICA
- Country: South Africa
- Topics: Africa,Commodities Markets,Economic Events
- Reuters ID: LVA001502930042022RP1
- Aspect Ratio: 16:9
- Story Text: Coal miners in South Africa are resorting to trucking more of their coal to ports as they scramble to meet surging European demand while deteriorating freight rail infrastructure costs them billions in potential revenue.
Poor maintenance, a lack of spare parts to fix locomotives, and cable theft have disrupted state logistics firm Transnet's freight rail services, causing coal and iron ore exports to fall and driving it to call force majeure last month on contracts with producers.
Trucking coal costs around four times more than transporting it on train according to junior coal miner Menar Resources, which has also started using trucks, but high prices mean the miners can absorb the extra cost - at least for now.
Menar is also pushing to invest in state-owned rail lines and procure its own locomotives and wagons, as part of attempts to overcome the country's infrastructure bottleneck.
At Canyon Coal's Khanye Colliery mine near Bronkhorstspruit, around 90 kilometres north-east of Johannesburg, huge stockpiles of export-quality coal were being scooped up and loaded into truck after truck as manager at Canyon Coals Khanye Colliery mine, Clifford Hallatt looked on.
A year ago, it was loading five or six Transnet trains a week at its Bronkhorstspruit rail siding, but now that has dropped to just two or three, and its stockpiles have been growing.
“April, March of 2021, we started experiencing issues with Transnet, availability of their trains, them being able to give us sufficient amount of trains required to move our product from the mines, from this mine and the other mines within the Menar group," said Hallatt.
At Khanye it takes around 80 trucks - carrying 34 tonnes each - to replace one average Transnet train, meaning the trucking solution is less sustainable not just financially, but also in terms of emissions and impact on roads.
Last week, a train carrying 3,100 tonnes of Menar's coal derailed near Middelburg. Menar said the derailment occurred because rail clamps, used to fasten the tracks, had been stolen.
Transnet Freight Rail CEO, Sizakele Mzimela said an investigation into the reasons for the derailment is ongoing.
“We did have a derailment, what is it, about a week ago now. I mean where 40 wagons derailed, so 40 wagons actually derailed. It is obviously currently under investigation, so yes our initial sense is that it has something to do with the rails, but with us the way in which we handle these things is that we run a full investigation before we say this is the cause of the incident,†she told Reuters.
But the mine has little choice.
“We were paying about 210 rands a ton via rail from Bronkhorstspruit to the port. At that point in time, trucking about 3 times the amount, currently we’re paying closer to 4 times due to the increase in fuel price also the demand in trucks increase quite significantly because the coal holders saw that there’s a gap in the market, there’s an opportunity and obviously they pushed up their prices,†Hallatt explained.
Demand has shot up, too: Menar says it has received requests for coal from industrials in European countries including Bulgaria, Denmark, Germany, Italy, the Netherlands, Poland, and Romania since the war in Ukraine began, with the European Union planning a ban on Russian coal.
Menar is trucking 120,000 tonnes of coal a month at the moment, and plans to increase that to 200,000 tonnes, Hallatt said.
As a whole, South African coal miners are putting around 400 trucks a day on the road, trucking about 6 million tonnes of coal on an annualized basis, according to the industry source.
“We are aware that there has been an increase in the number of trucks, of coal trucks now running into the ports and that’s not a good situation. And for me it’s not a good situation for the country more than anything in terms of the damage to the roads and congestion on the roads as well,†Mzimela said.
Transnet railed 58.3 million tonnes of coal to the Richards Bay Coal Terminal last year, 24% under its annual capacity of 77 million tonnes. Transnet expects an improvement in the delivery of coal this year, to about 60 million tonnes. As one medium-term solution, Transnet is open to mining companies investing in their own locomotives and wagons. In addition, earlier last month Transnet announced it would allow private rail operators to run on some container route slots but said it would not open its iron ore and coal lines to private companies.
In the meantime, coal mining companies have helped fund private security to combat theft on Transnet lines since August last year, including through drone surveillance.
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