Transnet will increase railway capacity to increase supply of raw materials

Transnet SOC Ltd plans to nearly double the capacity of its South African railroad line for transporting iron ore, as the state-owned operator is betting on higher output amid falling prices for steelmaking ingredients, just like the rest of the major miners.

As a result, it is planned to increase the capacity of the line by as much as 105 million tons per year from 60 million tons, adding an 861-kilometer stretch that will connect the mines of South Africa with a port on the southwest coast. The project provides for the construction of a temporary line to increase cargo traffic. The country is the largest producer of minerals on the continent and is striving to increase its production with the world's largest proven reserves.

Transnet also plans to build a heavy-duty line that will link the Waterberg coal basin to the company's main network. Research will be completed next year, with construction scheduled to begin in 2019. The line will connect Waterberg to the world's largest coal terminal Richards Bay on the Indian Ocean. The capacity of the coal line will increase to 97.5 million tons per year by 2019.

The company is trying to meet the rail transportation needs of miners who extract manganese, coal, iron ore and other raw materials used in steel production. South Africa is the continent's largest supplier of coal, with much of its production concentrated in the eastern province of Mpumalanga, where reserves are already running low. The companies are currently looking to develop the largely untapped resources of the Waterberg Basin in the northern province of Limpopo, which contains about 75 billion tonnes of coal, representing 40 percent of South Africa's resources.