Rail halt is further drag on sliding SA coal exports

A train derailment on South Africa’s main coal-export route will further reduce the country’s shipments of the fuel, which were already set to slide 14% this year.

Coal exports were forecast to drop to 50 million tons in 2022 from 58 million in 2021, Minerals Council South Africa estimated before the November 8 derailment. The incident was the latest disruption to freight in the country, with repeated halts and snarls costing the mining industry billions of rand in revenue.

The North Corridor route to the Richards Bay Coal Terminal remains shut after efforts to clear the line were stymied by extortion and violence, according to Transnet. The state-owned rail company has cleared almost a hundred wagons, but force majeure remains in place and operations won’t resume until all spilled coal and debris are removed, it said in a statement on Monday.

The derailment occurred after “threats and disruptions” by groups looking for work, according to Transnet. Crews trying to clear the line were then forced to leave after a group known as the Ulundi Business Forum, which had demanded contracts, resorted to violence, the company said Friday.

“Security on key export corridors must be a priority focus for the police to prevent criminal elements disrupting bulk exports for their own narrow gains at the expense of the country,” the minerals council said.

The Richards Bay Coal Terminal ships the majority of South Africa’s exports of the fuel. The facility is owned by a consortium of producers including Thungela Resources, Exxaro Resources and Glencore. Shipments to Europe rose eightfold in the first half of the year from 500 000 tons a year earlier.

© 2022 Bloomberg

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