More good newsWaterberg opens up to Exxaro as Transnet expansion...

More good news

Waterberg opens up to Exxaro as Transnet expansion gains traction

By: Natasha Odendaal

22nd August 2013

JOHANNESBURG (miningweekly.com) – JSE-listed Exxaro said it was optimistic about the “action on the ground” at State-owned Transnet Freight Rail (TFR) as it progressed plans to expand capacity on the existing rail network out of the Waterberg coal region.

The Waterberg region had one of South Africa’s largest remaining coal deposits and inadequate infrastructure was said to be holding back coal-mine developments in the area.

Exxaro, which was developing the Thabametsi mine, in the Waterberg, and the nearby Grootegeluk operations, in Limpopo, said that TFR would, by year-end, add 2.4-million tons a year of coal export rail capacity to the total current Waterberg capacity of between four-million and five-million tons.

By June next year, another 6.2-million tons a year would be added to the link, Exxaro executive head for coal Mxolisi Mgojo said on Thursday.

Speaking to the media after the group’s results presentation in Sandton, Mgojo said that, following about two years of seeking ways of “opening up the Waterberg”, the last few months had culminated in more “refined plans” for Exxaro and other potential coal producers in the region.

However, until new coal players, in addition to Exxaro’s Thabametsi mine, came on line during 2016/17, Exxaro would have full access to the rail link. The company said it had the capability to extract the required amount of coal, but doing so would depend on its supply contracts.

From 2016/17, the first phase of Thabametsi was expected to deliver 3.8-million tons a year to an on-site independent power producer.

The period of the coal supply agreement would be determined by the duration of the power purchase agreement signed with Eskom, which was estimated to extend up to 25 years.

The prefeasibility study for the Thabametsi mine was expected to be completed by the end of 2013, with the bankable feasibility study kicking off at the start of 2014.

Based on Eskom’s request for tonnages to Mpumalanga-based power stations, Exxaro previously committed to supply between 20-million tons and 30-million tons a year from the second phase of Thabametsi, but this would be rail dependent and could be realised by 2018.