Exxaro looks at port and rail expansion in Congo

5th June 2012 By: Reuters

CAPE TOWN – South African diversified miner Exxaro will upgrade a railway line in the Republic of Congo to transport at least 10-million tons a year by 2016 as it moves to exploit its recently acquired Mayoko iron-ore project, an official said on Tuesday.

The French-built railway, constructed in 1931, currently has a capacity of some five-million tons but needs to be repaired and upgraded in certain sections, said Ernst Venter, executive general manager for business development at Exxaro.

Exxaro, which bought Mayoko from African Iron, is also mulling building a new harbour and a power plant at the mine, which has an upside potential of 2.5-billion tons of iron-ore, said Venter.

"The decision will probably be to look at Indienne to establish a port which can at least treat this 10-million tons," he told Reuters on the sidelines of an African iron-ore conference.

The small town of Indienne lies north of a deep-water port at Pointe Noire on the Atlantic coast.

Venter said Exxaro would probably opt for Indienne as a location as it may be too difficult to convert Pointe Noire, used mainly as a container port, into a bulk iron ore exporting terminal.

Exxaro plans to start production at Myoko in 2013, producing between 200 000 t to two-million tons of iron-ore per year, he added.

Venter said Exxaro, one of South Africa's largest coal exporters, may build a power plant at Myoko through its Cennergi joint venture with Tata Power, but would need to sign offtake deals with other customers for at least 100 MW to make the project economically viable.

"It needs to supply power to the mine but we need a few big anchor customers," Venter said.