South Africa and Swaziland agree to construct $2 billion rail link

Swaziland, Lesotho and South Africa. Courtesy of World Sites Atlas (sitesatlas.com)

(Bloomberg) –Transnet SOC Ltd., the South African state-owned port and rail-freight operator, and Swaziland Rail agreed to build a line through the kingdom that will free up capacity to carry coal to Richards Bay.

“The first train will run in three years’ time,” Transnet Chief Executive Officer Brian Molefe said in Johannesburg today. The link will create additional capacity of 15 million metric tons annually to Richards Bay Coal Terminal, Africa’s largest export facility for the fuel, he said.

The 140-kilometer (87-mile) railway, to be built at a cost of as much as $1.98 billion, will run between the coal-producing province of Mpumalanga and the port to the east, cutting through landlocked Swaziland. The coal terminal’s owners include London- based Anglo American Plc and BHP Billiton Ltd., the world’s largest mining company.

“This is a general freight line and will be used to relieve pressure off the coal line,” said Mlamuli Buthelezi, acting chief executive of Richards Bay Coal Terminal.

Transnet plans to boost coal deliveries to the terminal by 17 percent to 74 million tons in 2012, Molefe said on December 7.

The railway, which will cost 12.3 billion rand (US$1.5 billion) to 16 billion rand (US$2 billion), will enable Transnet to remove general freight from the Richards Bay coal line and boost shipments to the terminal to 95 million tons a year in the next five to six years, Molefe said on October 26.