A R2.3-billion project to upgrade the railways network from the manganese-rich Northern Cape province to the Port of Ngqura, in the Eastern Cape, has been approved, Transnet Freight Rail (TFR) CEO Siyabonga Gama revealed on Tuesday.
Speaking at a business briefing organised by the Johannesburg Chamber of Commerce and Industry, Gama said the investment was the first phase of a larger R27-billion railways and harbour investment programme aimed at eventually raising South Africa’s yearly manganese export capacity to 21-million tons.
The first-phase target, though, was to increase the yearly export capacity from around 5.5-million tons to 12-million tons by mid-2017, which would involve port and rail investments of around R15-billion.
In total, TFR would invest R10.8-billion between 2012/13 and 2018/19 on rolling stock and infrastructure to support the manganese-corridor project, which would become its third heavy-haul export channel after coal and iron-ore.
The manganese-related investment itself was also but one component of a larger R200-billion-plus TFR capital expenditure programme, representing two-thirds of the Transnet group’s R300-billion Market Demand Strategy to modernise and expand its rail, ports and pipelines businesses.
The manganese-related investment would be used to upgrade the rail network from Hotazel, in the Northern Cape, to Coega to enable it to support axel loads of 26 t – the route would pass through Postmasburg, Kimberley, De Aar and Cradock on the way to South Africa’s newest deep-water harbour.
In parallel, portside investments would be made to facilitate the relocation of the existing Port Elizabeth manganese terminal to an enlarged and scalable facility at the Coega Industrial Development Zone (IDZ), which is situated alongside the Port of Ngqura. There were also private-sector-led plans for a new manganese smelter to be established in the IDZ.
The option to export manganese out of Ngqura was selected ahead of an alternative proposal to use the existing iron-ore channel from the Northern Cape mines to Saldanha Bay, on the West Coast.
The Northern Cape is the epicentre of South Africa’s manganese mining activities, with both large and small mining entities either operating or building mines in the territory. These included BHP Billiton and Anglo American, through Samancor, African Rainbow Minerals and Assore, through Assmang, as well as emerging miners Kalagadi Manganese, Tshipi é Ntle, United Manganese of the Kalahari and Kudumane.
About 80% of the world’s known manganese resources, used to improve rust and corrosion properties of steel, are located in South Africa.
The first phase of the railways infrastructure upgrade would involve the doubling of certain sections and the introduction of new passing loops to accommodate 200-wagon trains, operated using dual-voltage locomotives.
A new export terminal would be developed at Ngqura in parallel, with the integrated system scheduled for completion by mid-2017.
“This is a new heavy-haul line that we are bringing to bear,” Gama enthused, adding that the project would require close collaboration with miners, as well as internally, between TFR and Transnet’s National Port Authority.
He also saw potential for private sector investment in common-user rail-loading facilities.