South Africa, Swaziland to build multi-billion dollar rail line to increase mining capacity
In a move that will help the mining industries of both nations, South Africa and Swaziland have announced plans to construct a new 90-mile rail connection between the two countries, according to Mineweb.
The news source reported that Transnet Freight Rail and Swaziland Railway announced the construction of the line that would stretch from Lothair, South Africa, to Sidvokodo, Swaziland. Existing lines just north and south of the proposed rail connection will also be upgraded during the construction project.
"This is the first large scale rail investment in Southern Africa since the construction of the Richards Bay line in 1976," Brian Molefe, chief executive for Transnet, told Mineweb.
The new rail system would help companies expand into the Waterberg coal fields, as mine planning would become much easier once a more concrete infrastructure system was established, according to the news source.
Mineweb reported that the new rail line is expected to create an easier trade link for companies, as predominantly general freight volumes will be moved to the new project from the existing coal export line.
"We expect that significant capacity will be made available for export coal," Molefe told the news source. He confirmed that the target date for completion is within three years, "after the necessary land purchase agreements and environmental approvals have been resolved."
The massive project is projected to reduce poverty levels throughout the affected areas, encourage economic development and stimulate growth in employment. Along with the benefits to the local population, domestic and foreign miners will have greater access to an efficient transportation system for extracted resources.
Gideon Mahlalela, chief executive of Swaziland Rail noted "the economic potential of the affected countries will be unlocked" and that "the project should not be a mere railway line but a development corridor."
These feelings, that the rail line would be a boon for the local industry and may help encourage foreign investment, was felt by Malusi Gigaba, the Minister of Public Enterprises for South Africa.
"This project is deemed a strategic regional investment in that it holds significant advantages in attracting traffic to the Maputo and Richards Bay corridors; providing strategic alternative export corridors - critical to Southern African ports, as well as encouraging economic and rail transport growth in Swaziland," Gigaba said in a statement.
Reuters reported that this move would help to eliminate some of the congestion that had been reported by firms extracting coal from both countries, a move that is expected to increase mining efficiency in the region.
The total project is expected to cost roughly $2 billion and has been applauded by coal producers in both countries. These firms have been eager to export more coal to meet the rising demand for the commodity from China and India, but have been limited by bottlenecks on the lines leading to shipping ports, according to the news source.
Despite the economic state that Swaziland is currently in, executives for the transport companies noted that local banks are willing to provide funding for the project.
"The banks are actually coming to us. We are not going to them. They say they have money available," Mahlalela told Reuters.
According to the news source, the Waterberg region is expected to become the next coal hub in the area, due in part to the declining reserves in the Witbank area. The new line is expected to initially carry over 20 million tons, but may eventually grow to handle up to 80 million tons of the commodity if there was sufficient demand.