long-term coal supply a worry: eskom, page-6

Doesn't look like Eskom are going to get their wish of less exports, any time soon. See article below. Note that Transnet is also state owned. Note too that export grade coal (with higher CV specs) is not compatible with SA coal fired power stations - so any call for export restrictions will be targeting the lower grades of coal used in some Indian & Chinese power plants. This is actually a good sign, as it means Eskom will have to pay up for the quality domestic coal it demands. Don't forget that the more Conti accommodates Eskom, the greater is Conti's "social licence", and the easier it is to get new mine projects or acquisitions approved. As GS noted, this is undoubtedly one of the reasons Conti was the first company approved in the Kenya Mui Basin bid process.

Also, such calls from Eskom will only help accelerate coal project developments in Botswana and other Sthn African countries which currently rely on Eskom for power supplies. So fret not - sometimes what appears to be bad news is actually good news.

Transnet expects to rail 70Mt of coal to Richards Bay in 2011

By: Martin Creamer
2nd February 2011

CAPE TOWN (miningweekly.com) South African State-owned rail transport enterprise Transnet expects to transport 70-million tons of export coal to the Richards Bay Coal Terminal in KwaZulu-Natal, says Transnet GM Divyesh Kalan.

Kalan, who addressed the McCloskey coal conference in Cape Town, says that Transnet is progressing towards increasing the coal line capacity to 81 million tons a year as part of its Quantum Leap project.

Transnet is also working on a Beyond 81 Million project to increase the rail capacity beyond 81 million tons and to align it with port capacity, which is already at a level of 91 million tons.

Last year, Kalan guaranteed the conference that Transnet would export 65-million tons in 2010, but fell short of that at 63-million tons owing to a rail strike and a derailment.

Volumes slumped to 61.1-million tons in 2001, the low point of five consecutive years of decline.

Transnet is currently facing strong demand at a time of rising export coal prices, following the deluge in competing Australia.

Many at the conference expressed the desire for Transnet accelerate the coal line?s ramp up, given that iron-ore rail capacity to Saldanha has tended to match growth in global demand for iron-ore, which is due to rise to 60-million tons a year by 2013.

XMP Consulting coal analyst Xavier Prevost says that a consortium, which has received 35 expressions of interest, is expected to short-list four companies to work on the building of the World Bank-supported Trans-Kalahari rail line to the Namibian coast in March. [ed. which Conti has an interest in, as it will service Botswana coal projects]

Grindrod dry bulk terminals GM Craig Grinyer, who also addressed the conference, reports that the Maputo capacity will rise to six-million tons a year throughput is imminent.

Grinyer adds that Maputo port's channel has been dredged to 11 m from 9.3 m.

Kalan cites as issues holding up progress as delays in the delivery of the new 110 locomotives and the problems with crews of dealing currently with five different kinds of locomotives and two different braking systems.

New locomotives are being delivered at a rate of eight a month.

Kalan says that "full visibility" will enable Transnet management to lift its game. "We need to understand each other's business better," he adds.

Transnet has been able to introduce hundreds of new jumbo rail wagons to supplement the fleet and to reduce turnaround times.

Kalan says that there are also plans to increase the capacity of the Maputo channel and again reports that a rail plan for the Waterberg coal basin is near to completion.

Here's more on Eskom's woes:

Coal road-map completion, resources update crucial: Eskom

"Eskom estimates that some R110-billion ($16B) worth of new capital investment in new coal-mines and conveyor systems will be required over the coming decade to ensure that South Africa's current and future fleet of power stations are adequately supplied with primary energy."