R13.5BN COAL LINE EXPANSION

Transnet plans to invest R13.5 billion in expanding coal line capacity to 81 million tons a year. While this is good news for the coal mining industry which has complained that the railway is not able to keep up with demand, observers are speculating about the possible effects on the picture if substantially more coal goes to Eskom. Public enterprises minister Malusi Gigaba reportedly wants coal declared a strategic resource in order to give Eskom priority on supplies of good quality coal. Over the past 12 months, Transnet has increased export coal traffic by 8.8% to close on 68 million tons and expects to rail up to 75 million tons in the 2012-13 financial year