Page 7 - AfrElec Week 18 2022

AfrElec COAL AfrElec

Coal cargoes off the

rails in South Africa,

on trucks

SOUTH AFRICA SOUTH Africa’s deteriorating rail system is carrying 34 tonnes – to replace one average
pushing coal exporters to resort to trucks – Transnet train, making it unsustainable finan-
which cost four times as much to use as rail – cially, boosting emissions and clogging roads.
to move their cargoes to ports in the country, Menar is trucking about 120,000 tonnes
according to Reuters. of coal monthly and plans to increase that to
Coal demand has increased sharply in 200,000 tonnes, Hallatt told Reuters.
Europe since the continent banned importation Australian thermal coal futures were trad-
of Russian coal in response to Moscow’s Febru- ing at about $80/tonne at the start of 2021, but a
ary invasion of Ukraine. week after Russia’s invasion of Ukraine they had
With zero supplies from Russia, Europe is shot up to $440/tonne. Now they are down at
looking to South Africa and other countries for $326/tonne.
more deliveries. An industry source told Reuters that South
However, Reuters reported on Tuesday, May African coal miners are putting about 400 trucks
3, miners in South Africa are having to bypass on the road daily, to move about 6mn tonnes of
the country’s rail system, which is creaking coal on an annualised basis.
under the weight of copper cable thefts, vandal- “We are aware that there’s been an increase
ism and lack of spare parts. in the number of coal trucks now running into
Some companies plan to invest in new the ports and that’s not a good situation,” said
coal-trucking businesses, while others are con- Transnet Freight Rail’s Chief Executive Sizakele
sidering procuring their own locomotives and Mzimela.
wagons to move the commodity on Transnet, Last year, Transnet shipped 58.3mn tonnes
the rail utility’s network. of coal to the Richards Bay Coal Terminal, 24%
In April, Transnet declared force majeure on below its annual capacity of 77mn tonnes. The
contracts with producers, but with coal prices utility expects deliveries to increase to 60mn
near record highs, mining firms including tonnes this year.
Swiss-headquartered Glencore have turned to However, Reuters reports, citing South Afri-
trucks, an industry source told Reuters. A Glen- ca’s Minerals Council, “limited rail capacity cost
core spokesperson declined to comment, the bulk commodity exporters at least ZAR35bn
global news agency said. ($2.2bn) last year in lost revenue.”
Trucking coal costs about four times more Mzimela observed: “The frustration is more
than using Transnet, according to miner Menar, about the lost opportunity because of course if
which has started using trucks. The company is we were able to move more, we would benefit,
able to absorb the cost given the high coal prices. they would benefit. We are tied at the hip.”
“The industry at large are on their knees, so Menar said it was pushing to invest in state-
they are resorting to drastic measures,” said Clif- owned rail lines and procure its own locomotives
ford Hallatt, chief operating officer at Canyon and wagons as part of attempts to overcome the
Coal, a joint venture between Menar and com- country’s infrastructure bottleneck.
modity trader Mercuria. Transnet, Mzimela said, has no problem with
At Canyon Coal’s Khanye Colliery, some 90 miners seeking alternative modes to transport
km (55 miles) from Johannesburg, South Afri- their products, but it will not open its coal and
ca’s biggest city, it takes about 80 trucks – each iron-ore business to private companies.™

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