Photo by: Creamer Media
Freight logistics group Transnet has missed its half-year coal export target by 2.3-million tons, the State-owned company reported on Wednesday, citing locomotive failures, community unrest, as well as customer and export terminal constraints.
The export coal line, which connects mines in Mpumalanga with the Richards Bay Coal Terminal (RBCT), in KwaZulu-Natal, transported 35.7-million tons in the first half of the 2019 financial year, down 5.6% on the prior-year period.
Transnet explained that community unrest directed at the rail operations in Indondotha, KwaZulu-Natal, had resulted in the intermittent closure of the coal line.
Coal volumes were also affected by significant customer-related challenges, especially relating to product unavailability at the start of the 2019 financial year, while Transnet Freight Rail (TFR) also did not have any business from the Optimum mine, which is in business rescue.
Transnet added that wet product and weather conditions had impacted on offloading capabilities at RBCT, further affecting TFR's coal volumes.
The iron-ore export line, which was recently closed for several days after a truck severely damaged the line, increased its volumes by 3.1% to 30.1-million tons in the six months. The improved performance was attributed to efficiency improvements and improved customer demand from major and emerging miners.
The general freight business of TFR reported a 6.9% decrease in volumes to 43.3-million tonnes, which Transnet attributed to the weak economic climate. However, there were some bright spots, with chrome volumes increasing by 16.1% to 3.6-million tons and manganese volumes increasing by 4.4% to 7.1-million tons.
The container and automotive business, as well as the timber and paper publishing sectors remained constant at 4.9-million tons and 1.2-million tons, respectively.
Transnet said that majority of TFR’s general freight business did not perform well, with domestic coal volumes decreasing by 18.4% to 8.4-million tons, owing to the reduction in Eskom sourcing points and delays in approvals of new projects, such as Arnot and Camden.
Fuel and petroleum volumes decreased by 22.6% to 534 000 t in the interim period, which the company explained was as a result of a reduction in demand and a switch from rail to pipeline.
Meanwhile, Transnet reported a 15% decrease in after-tax profit to R2.8-billion in the six months ended September 30. The group’s revenue increased by 1.3% to R37.6-billion, of which TFR comprised R22.04-billion.
TFR’s revenue increase was driven by a 5% increase in the rand per ton rate from R186 in the prior-year period to R195.40, making up for the decrease in volumes.