Botswana, South Africa seek funds for $230m minerals line

31st July 2023

By: Bloomberg


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State-owned rail companies from Botswana and South Africa are seeking funding for a three-billion pula ($230-million) railway line between the two countries to transport commodities including coal.

The Mmamabula-Lephalale link will run 113 km and have a capacity of 24-million tons a year. It will connect to existing routes to South Africa’s Richards Bay and the Maputo port in Mozambique — both key export terminals for bulk minerals.

An expression of interest showed the project will also involve 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 will run it as a public-private partnership, with no financial contributions from the two governments.

Botswana has estimated coal resources of more than 200-billion tons, according to its government, but the industry has been hampered by the lack of rail-export capacity. The southern African nation’s two coal mines have largely moved their output by truck to neighbouring countries. South Africa uses coal to produce about 80% of its electricity capacity, while Transnet is battling disruptions to its services because of damage to and theft of its rail infrastructure.

“The Mmamabula-Lephalale rail link will be operated as one seamless service with no stopovers at the South Africa-Botswana border,” according to the notice. “On completion, the rail link is expected to deliver significant socioeconomic benefits such as a shift from road to rail.”

Transnet Freight spokesperson Bonginkosi Mabaso said the project wasn’t expected to face funding challenges, despite 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 on Monday.

Edited by Bloomberg




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