South African rail capacity curbs coal exports by 9 million tons

South Africa’s coal exports slowed in the first half of the year due to security problems and a lack of rail capacity by state-owned Transnet SOC Ltd., according to miner Exxaro Resources Ltd.

As thermal coal prices surpassed $100 a ton during the period, about 9 million tons of producers’ shipments were “lost” due to transport issues, Exxaro said in a results statement.

“Locomotive unavailability, coal line shutdown disruptions, derailments, and other operational challenges combined with vandalism and sabotage of rail infrastructure and rampant cable theft have resulted in one of the worst export rail performances for the industry,” the company said in the statement.

Transnet’s rail line is the main route from South Africa’s mines to Richards Bay Coal Terminal, the largest facility of its kind on the continent, which exported 70.2 million tons of the fuel in 2020. The company is investigating recent derailments and plans to reduce dependency on outside contractors that may benefit from the accidents. India, Pakistan and China are the biggest export destinations for the coal.

“Eventually it will be resolved,” Exxaro Finance Director Riaan Koppeschaar said in an interview. The operational issue is largely due to the availability of locomotives, which should be worked out by the end of the year and there’s a wider effort to improve security, he said.