South African diversified resources company, Exxaro, has signed a coal export transportation agreement with Transnet which will increase coal volumes from Waterberg to Richards Bay Coal Terminal.
The 10-year agreement between Exxaro and Transnet will allow for the transportation of a total of 7,8 million tonnes (Mt) of export coal – 3Mt will come from the Waterberg once all the projects are ramped up, the two companies has announced.
Exxaro Chief Executive Officer Mxolisi Mgojo was excited the landmark deal between the two companies would also create jobs.
“Exxaro is proud to be developing the Waterberg area in collaboration with Transnet. This is an exciting milestone for Exxaro and is a realisation of our vision to contributing to the unlocking of the Waterberg, thus creating jobs and powering economic development in South Africa. As such, we will be investing 50% of our R20bn coal capex programme over the next five years in coal in the Waterberg area.” said Mgojo.
He said Transnet has a proven track record in building rail capacity and expanding export rail performance in the Waterberg area and across South Africa.
“This agreement is testament to healthy public-private partnerships. It will also enable Transnet to increase rail infrastructure capacity to service both domestic and export markets from the Waterberg area,” Mgojo added.
The new contract will also see the collapse of the old agreement between Transnet and Exxaro Resource Limited.
This fresh agreement comes at the time when the Transnet’s Waterberg Programme is in full swing.
The second phase of the project has been planned to be completed in March 2019.
Mgojo said the Waterberg upgrade phase two would grow export rail capacity to 6Mt.
He said this would be achieved through the upgrading of the existing rail networks and yards using additional loops, while maintaining the existing axle load, electrical and improved train control systems.
He said the agreement was a key contribution to the Waterberg expansion programme earmarked in the National Development Plan (NDP) as a strategic coal mining area and national asset to growing the South African economy.
“We are pleased with reaching a key milestone with Exxaro to improve rail infrastructure in the Waterberg area which includes the strengthening and expansion of the Waterberg Link (the Lephalale Line).We are a key enabler to growing the South African economy and are playing our role in developing more rail capacity and unlocking the capacity of the Waterberg region to domestic and export markets.” said Transnet Group CEO Siyabonga Gama.
Exxaro’s signing of the long-term agreement with Transnet will enable the GG6 expansion of the Grootegeluk operation in the Waterberg area that requires rail capacity to Richards Bay Coal Terminal.
The signing of the contract comes on the foot of the completion of first phase in the Waterberg Expansion Programme in 2016 which included a 1.8km passing loop which enables 100- wagons trains to cross without disrupting other rail operations on the line.