State-owned rail companies from the two countries, Botswana and South Africa are currently looking for funding for a R4.1 billion ($230 million) railway line between the two countries to transport commodities, including coal.
The Mmamabula-Lephalale link will be running 113 kilometres and have a capacity of 24 million tonnes a year. It will be connecting to existing routes to South Africa’s Richards Bay and the Maputo port in Mozambique, and both key export terminals are for bulk minerals.
An expression of interest showed the project is set to also include upgrades of existing facilities, such as the Multiple Purpose Terminal at Richards Bay, to accommodate the increased volumes from Botswana.
Transnet Freight Rail and Botswana Railways are going to be running it as a public-private partnership, with no financial contributions from the two governments.
According to its government, Botswana has given an estimation of coal resources that more than 200 billion tons, but the industry has been hampered by the lack of rail-export capacity.
South Africa uses coal to produce up to of its electricity capacity, and the same time, Transnet is having trouble with disruptions to its services because of damage to and theft of its rail infrastructure.
According to the notice, the Mmamabula-Lephalale rail link will be operated as one seamless service with no stopovers at the South Africa-Botswana border. “On completion, the rail link is expected to deliver significant socioeconomic benefits such as a shift from road to rail.”
The spokesperson for Transnet Freight, Bonginkosi Mabaso also revealed that the project wasn’t expected to face funding challenges, even though there is a global aversion to coal financing.
“This link is a regional integration initiative, and there are also other commodities that will be transported in the line other than coal,” he said in an emailed response to questions from the Daily Investor.
