South African diversified miner, Exxaro Resource, on Tuesday signed a 10-year coal export transportation agreement with the country's state-owned logistics company, Transnet, in a bid to increase coal volumes from Waterberg to Richards Bay Coal Terminal.
Over 50 percent of South Africa’s remaining reserves lie in the Waterberg coalfields, a 3,500km2 expanse of Limpopo that stretches into Botswana and hosts almost 76 billion tonnes of in-situ inferred resources in 11 coal-bearing zones.
Exxaro said the agreement with Transnet will allow for the transportation of a total of 7.8 million tonnes of export coal, of which three million tonnes will come from the Waterberg once all the projects are ramped up.
Exxaro chief executive, Mxolisi Mgojo, said the miner was 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," Mgojo said.
"As such, we will be investing 50 percent of our R20 billion coal capex programme over the next five years in coal in the Waterberg area."
Mgojo also said that Transnet had a proven track record in building rail capacity and expanding export rail performance in the Waterberg area and across South Africa.
Siyabonga Gama, Transnet Group chief executive, also welcomed the agreement.
"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)," Gama said.
"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."
This agreement comes at a time when the Transnet's Waterberg Programme is in full swing with plans to complete the second phase of the project in March 2019.
The first phase in the Waterberg Expansion Programme was completed in 2016 and it included a 1.8km passing loop which enables 100-wagon trains to cross without disrupting other rail operations on the line.
The Waterberg upgrade phase two will grow export rail capacity to six million 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.
Exxaro said 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.
- African News Agency (ANA)