Finweek English Edition - - INVESTMENT -

Exxaro is get­ting some joy from an­other Govern­ment-owned com­pany with which it deals, Transnet Freight Rail (TFR), the freight di­vi­sion of Transnet. Ac­cord­ing to Mx­olisi Mgojo, head of Exxaro’s coal busi­ness, vol­umes on the coal line from the Water­berg is set to in­crease to 6.5m tons a year from 4m tons/year this year.

“We are be­gin­ning to see a c u l mi n a t i o n o f p r o c e s s o f en­gage­ment with Transnet and TFR,” said Mgojo. “They [ Transnet] are com­ing up with st rat­egy t o un­lock t he North West cor­ri­dor. We have been work­ing very hard with TFR and other crit­i­cal stake­hold­ers i n say­ing what sort of struc­ture we can put in place,” he says.

“Phys­i­cally, on t he ground over next three to four years, the in­ten­tion is to get to 28m tons/ year on that line. The next loop [ex­pan­sion of the rail l i ne] will take ca­pac­ity to 10m tons/year and al­low 200 wagon trains to be brought up,” he says.

Pro­vid­ing bet­ter in­fra­struc­ture to the Water­berg i s crit­i­cal to di­ver­si­fy­ing Eskom’s ac­cess to coal re­sources es­pe­cially as i t nears 2018 when many of the l ong- stand­ing con­tracts ex­pire and new ones have to be signed.

Exxaro is also bullish about its Thabametsi mine, pro­duc­tion f rom which i s a mod­est 3. 8m tons/year but which is ex­pected to build over time. Ernst Venter, ex­ec­u­tive GM for busi­ness growth at Exxaro, says he’s ex­cited about the po­ten­tial.

“Thabametsi could de­velop i nto a sim­i­lar com­plex as t he Water­berg pro­duc­ing eight dif­fer­ent prod­ucts [of coal],” he says. The mine has an es­ti­mated 5bn tons of coal re­sources. “It’s mas­sive,” says Venter. “We will have to see how we can ratchet up from that.”

Wim de Klerk

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