Transnet considers ship repair facility for Saldanha Bay

TRANSNET was assessing proposals for a business plan to set up a ship repair facility, Vuyo Kahla, a group executive in the office of the group chief executive, said yesterday.

Kahla said no decision had been taken yet on whether the facility would indeed be established and where it would be situated, as the company still needed to evaluate its viability.

"Every now and again, people raise the need for a ship repair facility. There seems to be a belief that there is a market for it," Kahla said.

"If there is a business case for it, we will invest in activities that will support the ship repair facility but we would want to bring in people who have the expertise."

Kahla said in the event that a ship repair facility was built, the transport parastatal's main role would be to provide the property using the National Ports Authority's assets.

"We don't see ourselves as experts in ship repair. We will work out where there could be a proper place and the private sector will be involved," he said. "We want to run our ports on a complementary system. But the key point is that not everything will be done by ourselves," he added.

Kahla said many people believed that a ship repair facility would be viable because the number of vessels going round the Cape had increased as people avoided Somali seas owing to the piracy risk.

Transnet sought proposals from the private sector in February. If built, the facility would be housed at either Richards Bay port or Saldanha Bay port.

Meanwhile, Kahla said the company would make a decision within a year on where to move the manganese ore line, which is currently run from the Port Elizabeth port.

He said people had been calling for the line to be moved elsewhere for some time and the general expectation was that it would shift to the newly built port of Ngqura.

"At the moment, we are assessing what would be the best option. It is between Ngqura and Saldanha Bay," said Kahla.

Although most people expect the ore line to be moved to Ngqura, Kahla said Saldanha Bay was probably ideally suited because the manganese ore came from the Northern Cape, and Saldanha Bay was closer.

Kahla said the shipping of containers could replace the shipping of manganese ore in Port Elizabeth.

Transnet is working with the industry to increase manganese exports to 12 million tons a year by 2012.

The Northern Cape to Saldanha Bay export line is well-established, as it handles the iron ore line. At present, 47 million tons of iron ore are exported a year.

Source http://www.busrep.co.za

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Saldanha Bay possible coal export port.

JOHANNESBURG, Feb 22 (Reuters) - expects to focus its diversification strategy on coal and copper, with a new coal mine envisaged within the next three to four years, head of its coal unit said on Monday.

Mangisi Gule said the growing power demand in the country justified the investment, and said the new mine would most likely be built in the north-eastern Mpumalanga province where the necessary infrastructure was already available.

In the future, the company is also looking to grow in the northern Waterberg region, touted to become South Africa's new coal hub, and in other parts of the continent.

ARM, which is developing all of its coal projects in a joint venture with Xstrata, commissioned the Goedgevonden coal mine late last year, which is expected to produce 6.7 million tonnes of thermal coal per year by 2011.

Of this projected output, 3.2 million tonnes will be exported by 2011, and 2.5 million tonnes is scheduled to be shipped this year.

ARM has been promised its own export allocation of 3.2 million tonnes at the Richards Bay Coal Terminal (RBCT), which is expanding to export up to 91 million tonnes of the mineral from 76 million tonnes.

But bottlenecks on the rail lines to the port have dented confidence in logistics group Transnet and its ability to bring more coal to the port than the 61 million tonnes it managed to rail last year.

Gule said it was likely ARM would only get parts of its export allocation this year, and would seek to export the remaining coal via Xstrata's allowance.

'We would like to get our promised 3.2 million tonnes allocation... but given what Transnet said ... this year we think 1.7 million tonnes (of our own allocation) is more realistic,' he told Reuters after a results presentation.

Separately, Executive Director for Business Development Stompie Shiels said that Transnet had agreed to grant three manganese producers, including ARM, a total rail allocation to Port Elizabeth of 4.4 million tonnes.

He declined to say how much of that would go to ARM, but said that the company would also seek alternative routes via the ports in Durban, Richards Bay and Saldanha Bay.

ARM, which has interests in nickel, coal, iron ore, platinum, chrome and manganese, reported an 80 percent drop in headline earnings per share for the six months to the end of December, owing to lower commodity prices and a strong rand against the U.S. dollar.

(Reporting by Agnieszka Flak) (For more Africa cover visit: http://af.reuters.com -- To comment on this story email: SouthAfrica.Newsroom@reuters.com)

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South African commodity lines at heart of Transnet investment plans

Mining Weekly reported that Transnet commodity corridors in South Africa were likely to be the main beneficiaries of the State owned transport utility's expanded 5 year capital investment program.

Mr Chris Wells acting CEO of Transnet said that the new plan, which would be unveiled in February, would probably involve a 10% increase in the budget of the current rolling plan which stands at ZAR 80.5 billion.

The group had 2 main commodity lines: the coal line, linking the coalfields of Mpumalanga province with the export terminal at Richards Bay and the iron ore line from Sishen to Saldanha.

Mr Wells indicated that the main focus would be on the procurement and upgrading of locomotives and wagons for the commodity lines, but stressed that these projects still had to receive board approval. The group had invested ZAR 62 billion over the last 4 and half years in the upgrading and modernizing of existing facilities, as well as in expanding infrastructure capacity.

Its projects were also fully funded up until the end of the current financial year, and the group currently has ZAR 8 billion in cash on hand, which had been raised "opportunistically", so as to ensure that there was sufficient and timely funding for the projects. It was also confident of being able to fund the expanded project pipeline, without recourse to its shareholder, the South African government.

Transnet was in consultation with manganese exporters on the development of a new export channel which could either flow through the deep water harbor at Saldanha Bay, on South Africa's West Coast or through the new port at Ngqura in the Eastern Cape. Several possible private sector participation models were being considered, with BHP Billiton, African Rainbow Minerals and Assore having already indicated a preference for converting the Sishen line into a dual commodity channel.

The Sishen Saldanha heavy haul line had emerged as Transnet Freight Rail's top performing corridor with exports tons increasing by 32.7% to 21.1 million tonnes in the 6 months to September 30th 2009. The manganese miners would like to have access to this channel so as to boost exports from the Kalahari manganese field to some 12 million tonnes per year from the current position of around 5 million tonnes yearly, most of which is currently moved through the depth and land constrained harbor at Port Elizabeth.

The iron ore channel was in the process of being ramped up from 47 million tonnes to 60 million tonnes and a combined 90 million tonne channel with 78 million tonnes for iron ore and 12 million tonnes for manganese could be pursued. There were also various plans to raise the capacity of the coal rail corridor through to Richards Bay.

(Sourced from Mining Weekly)

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Transnet considering investment on the West Coast.

State freight logistics group Transnet, in consultation with manganese exporters, expects to decide within the "next four to five months" whether to develop a new export channel through the deepwater harbour at Saldanha Bay, on South Africa's West Coast, or to proceed with an alternative model involving ports on the country's eastern seaboard.

Acting CEO Chris Wells tells Engineering News Online that the group is also interrogating several possible private-sector participation (PSP) models for the two alternatives, both of which would involve "significant investment".

He refuses to be drawn, however, on the amount of capital that could be involved, or on the nature of the partnerships being investigated, saying only that the PSP model is integral the plan and is being canvassed with the miners as the studies progress.

For their part, the miners involved (BHP Billiton, African Rainbow Minerals and Assore) have indicated previously that they would prefer to "go west", and convert the high-performance Sishen-Saldanha line into a dual commodity channel for iron-ore and manganese.

That said, they have supported Transnet's investigations into both a western corridor, as well as an eastern corridor involving the harbours of Port Elizabeth, Ngqura and Durban. Still, the miners feel that greater efficiencies would be possible on a channel that is dedicated to bulk commodities, rather than one that will also have to cater for general freight.

Currently, the Sishen-Saldanha heavy-haul line is dedicated to iron-ore exports, and has emerged as Transnet Freight Rail's (TFR's) top performing corridor during 2009.

In the six months to September 30, export tons increased by 32,7% to 21,1-million tons in line with contractual commitments TFR has with Anglo American's Kumba Iron Ore and Assmang, the joint venture between African Rainbow Mineral and Assore.

The manganese miners would like to have access to this channel so as to boost exports from the Kalahari manganese field to some 12-million tons a year, from the current position of around five-million tons yearly, most of which is currently moved through the depth- and land-constrained harbour at Port Elizabeth.

The Port Elizabeth channel has a theoretical capacity of six-million tons yearly, but it is unlikely that this nameplate will ever be achieved, owing to a number of constraints, especially relating to stockpiles.

"The big issue is that there is demand from the industry for a 12-million ton business, which is a massive ramp-up," Well explains.

Under the current configuration, the yearly peak is expected to be about seven-million tons, with Port Elizabeth probably only able to handle 4,5-million tons and with Durban in a position to handle up to 2,5-million tons.

So, to reach the 12-million target, there are only two alternatives: to develop a terminal at the new deepwater harbour at Ngqura and continue using Durban for the overflow; or transform the bulk terminal at Saldahna into a dual commodity facility for iron-ore and manganese.

The iron-ore channel was in the process of being ramped up from 47-million tons to 60-million tons, but significant levels of capital will be required to go beyond that level.

"To move to 80-million tons, which the iron-ore industry wants, will require massive investment into new infrastructure and rolling stock," Wells outlines, adding that any move towards the 100-million ton level once mooted, "looks prohibitively expensive".

However, a combined 90-million ton channel, with 78-million tons for iron-ore and 12-million tons for manganese, "looks full of potential"- this is reportedly because there would be a greater sharing of risk, especially at the port, than would be the case if only one commodity was involved.

"Either way, the investment would be significant, and while we could probably cater for it on our balance sheet, we would probably look at some kind of PSP with the miners," Wells concludes.

Story by Terance Creamer of the Engineering News

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Saldanha water quality has a worrying down trend.

Despite some positive signs regarding improved water quality readings in Saldanha Bay and the Langebaan lagoon - an internationally protected Ramsar site - the overall picture is of a natural environment being incrementally degraded, say scientists.
The ‘State of the Bay 2008: Saldanha Bay and Langebaan Lagoon’ report by Anchor Environmental Consultants, released on Thursday last week, revealed detailed analysis of discharges from human activity; water quality; sediments; benthic macrofauna; intertidal invertebrates; fish and birds.
A number of worrying trends are contained in the report, presented by Barry Clark from the University of Cape Town (UCT) Zoology Department.
One of these was the overall downward trend in the number and diversity of benthic macrofauna (species larger than 1.0mm in size living in sediment) in all three bays studied: small bay; big bay; and Langebaan lagoon.
The poorest results in the entire spectrum of tests were obtained from small bay - which showed the most ecological degradation over all, with parts of it being a “dead zone”.
There were some improvements in the health of benthic macrofauna in big bay compared to previous years, one notable success being the return of the sea pen Virgularia schultzei to the area.
Langebaan lagoon has seen little change over recent years, but, as with the other areas, comparisons to data from 1975 show a marked decrease in benthic macrofauna diversity and abundance.
There was also a worrying decline in the resident wading bird population in Langebaan lagoon, an area which is seen as the most important wetland for these birds on the west coast of Southern Africa, and is ranked as the fourth most important estuary for waterbirds.
Although there did not seem to be any real long term changes to fish communities in the bay, there is “some evidence to suggest that tolerant species are becoming more abundant while more sensitive species are declining in abundance”.
While the bay supported what was probably the last healthy population of white stumpnose, a major drawcard for both commercial and recreational fishermen, Clark noted that about 40% of the adult white stumpnose population was being caught, a situation which was “not sustainable”.
He said the health of the current population was likely due to the Langebaan lagoon serving as a protected nursery, and degradation of that ecosystem would have severe negative consequences.
And the health of the white stumpnose population could not be taken for granted.
“There is a trend toward severe exploitation of this stock, and the balance may soon be tipped.”
Thus fishing in the bay required proper, enforced controls.
The report noted that dredging activities carried out by Transnet had marked negative effects on the health of the bay as it stirred up fine particulate matter, unearthing the toxic metals which clung to it.
To Transnet’s credit, they kept harbour dredging activities to a minimum, but the planned phase 2 expansion of the iron ore terminal would require extensive dredging activities, further compromising the quality of the bay’s ecosystem.
Increased shipping as a result of the expansion would also involve increased amounts of polluting ballast water, taken in at highly polluted Eastern ports and containing pollutants and alien species which were then released into the bay, as well as increased risk of spills and accidents. - West Cape News

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Transnet Saldanha Bay

Global locomotive supplier GE Transportation has completed the installation of a distributed power system on the Orex iron-ore line, making it possible to increase the line’s freight capacity.

South Africa’s Orex line, which is owned and managed by State-owned utility Transnet, is the critical ore feeder line running from Kumba’s Sishen mine, in the Northern Cape, to the Port of Saldanha Bay, on the West Coast of the country.

GE South Africa Technologies CEO Phedzi Radzilani explains that the Locotrol distributed power system, the first train power distribution and control system of its kind worldwide, allows for longer freight trains and increased freight capacity without the need to invest in costly infrastructure.

“Through this system, power is distributed to locomotives spaced throughout the train.”

“The system provides not only single- station power control, but also readily accessible, centralised diagnostics in the event of a breakdown.

“With Locotrol, the train driver knows at all times exactly what each section of the train is doing, including what speed it is travelling at, what braking power it needs or is exerting, and how healthy it is.

“In-train sections are shorter and weigh less, and need less braking force, which results in substantial cost savings on fuel, brake wear and tear, and maintenance”.

Radzilani elaborates that the system has been tested and proven for more than two decades, and has been installed in more than 6 000 freight systems globally.

Transnet awarded the contract in July 2005, with the first prototype commissioned a year later.
Locotrol has now been fitted on thirty-one 9E electric units and 20 diesel locomotives altogether.

The Locotrol system has enabled Transnet to run the longest multiengine system freight train in the world, with a length of 3,8 km.

The system has also enabled Transnet to increase freight capacity, boosting iron-ore exports.

In addition to the installation of the Locotrol system, Radzilani explains that Transnet has also selected GE Hydra-Switch tech- nology for the Saldanha yard and secondary lines. This Hydra-Switch mechanism allows customers to increase automation for additional productivity and worker safety.

These projects form part of Transnet’s R5,8-billion iron-ore export channel expansion programme between Sishen and Saldanha.

The upgrade is being undertaken by Transnet and Kumba Iron Ore in order to facilitate the planned expansion in iron-ore export volumes to a maximum capacity of 93-million tons a year.

This project involves the upgrade of the Sishen–Saldanha iron-ore line from the current 38-million tons a year to 47-million tons a year by 2009/10, and a further expansion of the line from 47-million tons a year to 60-million tons a year by 2012.

According to GE Transportation regional sales leader for sub-Saharan Africa Swaady Martin, Transnet is the company’s single largest customer on the continent.

“Despite the economic downturn, the train operator told us that they expect projects to continue with some possible reprioritisation,” concludes Martin.

Edited by: Martin Zhuwakinyu