South African-based diversified mining company, Exxaro Resource Ltd, has signed a coal export transportation agreement with Transnet, which will increase coal volumes from Waterberg to Richards Bay Coal Terminal.
The announcement made on Wednesday, noted that the 10-year agreement between the duo will enable the transportation of a total of 7,8 million tonnes (Mt) of export coal, of which 3Mt will come from the Waterberg once all the projects are ramped up.
Coal Export Deal
Commenting on the signing of the Agreement, Mxolisi Mgojo, chief executive officer of Exxaro said: “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.”
Transnet has a proven track record in building rail capacity and expanding export rail performance in the Waterberg area and across South Africa.
According to the mining house, the 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, a company statement explained.
“This fresh agreement comes at the time when the Transnet’s Waterberg Programme is in full swing with plans to complete the second phase of the project in March 2019,” Exxaro noted.
Adding that: “The Waterberg upgrade phase two will grow export rail capacity to 6Mt through incremental upgrades of the existing rail networks and yards using additional loops, while maintaining the existing axle load, electrical upgrades and improved train control systems.
“The agreement is 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.”
Siyabonga Gama, Transnet Group CEO said: “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.”
Exxaro highlighted in a statement that the 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 enabling 100- wagon trains to cross without disrupting other rail operations on the line.