SA’s coal rail export bottlenecks are getting worse

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SA’s coal rail export bottlenecks are getting worse

6:24 CAT | 27 Jun 2023

File photo: Bloomberg

Coal shipments by Transnet have dropped to an annualised rate of 46.5 million tons, Exxaro said.

South Africa’s rail bottlenecks are getting worse, with the country on course to deliver less coal to the coast for export than last year, according to miner Exxaro Resources.

Coal shipments by state-owned port and rail company Transnet have dropped to an annualised rate of 46.5 million tons, Exxaro said on Tuesday. That’s down from the 50.4 million tons it carried from mines to the Richards Bay Coal Terminal for export in 2022 — already the lowest volume in three decades.

“Various challenges, including poor locomotive availability, train derailments, and instances of cable theft and vandalism continue to impact negatively on export performance,” Exxaro said in an update. Transnet and the coal industry continue to collaborate on efforts to improve rail performance.

Exxaro’s sales volumes are expected to decrease by 6% due to the slump in shipments and as lower coal prices make it less attractive to truck coal to alternative ports, the company said. Richards Bay Coal Terminal export prices for the first half of 2023 are expected to average $127 a ton, compared with $265 a ton in the previous six months.

Source: Bloomberg