JOHANNESBURG (miningweekly.com) - Transnet's commodity corridors in South Africa were likely to be the main beneficiaries of the State-owned transport utility's expanded five-year capital investment programme, acting CEO Chris Wells reported on Friday.

He confirmed that the new plan, which would be unveiled in February, would probably involve a 10% increase in the budget of the current rolling plan, which stands at R80,5-billion.

The group had two main commodity lines: the coal line, linking the coalfields of Mpumalanga province with the export terminal at Richards Bay; and the iron-ore line from Sishen to Saldanha.

Wells indicated that the main focus would be on the procurement and/or upgrading of locomotives and wagons for the commodity lines, but stressed that these projects still had to receive board approval.

The group had invested R62-billion over the last four-and-half years in the upgrading and modernising of existing facilities, as well as in expanding infrastructure capacity.

Its projects were also fully funded up until the end of the current financial year, and the group currently has R8-billion in cash on hand, which had been raised "opportunistically", so as to ensure that there was sufficient and timely funding for the projects.

It was also confident of being able to fund the expanded project pipeline, without recourse to its shareholder, the South African government.

Transnet was in consultation with manganese exporters on the development of a new export channel, which could either flow through the deep-water harbour at Saldanha Bay, on South Africa's West Coast, or through the new port at Ngqura, in the Eastern Cape.

Several possible private-sector participation models were being considered, with BHP Billiton, African Rainbow Minerals and Assore having already indicated a preference for converting the Sishen line into a dual commodity channel.

The Sishen-Saldanha heavy-haul line had emerged as Transnet Freight Rail's top performing corridor, with export tons increasing by 32,7% to 21,1-million tons in the six months to September 30, 2009.

The manganese miners would like to have access to this channel so as to boost exports from the Kalahari manganese field to some 12-million tons a year, from the current position of around five-million tons yearly, most of which is currently moved through the depth- and land-constrained harbour at Port Elizabeth.

The iron-ore channel was in the process of being ramped up from 47-million tons to 60-million tons, and a combined 90-million ton channel, with 78-million tons for iron-ore and 12-million tons for manganese, could be pursued.

There were also various plans to raise the capacity of the coal rail corridor through to Richards Bay.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.