In South Africa,Transnet and BHP Billiton have signed a ten-year contract worth $218 million a year to move coal by rail to Richards Bay Coal Terminal. This forms part of the state company’s plan to expand capacity on the existing rail link to the port from 73mt (million tonnes) to 81mt over the next seven years. In total, it is to invest $27 billion in its entire rail network, including the acquisition of 100 new heavy-haul locomotives for the RBCT line.

According to Transnet chief executive Brian Molefe similar agreements will also eventually be signed with 28 other coal producers this year.

Nevertheless, some industry analysts in South Africa are questioning where the additional 8mt of export coal will be sourced from, given that many of the largest coal mines have all but reach the end of their productive life, leaving Glencore the only one with substantial reserves. 

 Barry Cross