The slowdown in Transnet’s capital spending programme — particularly on the rail network for cyclical dry bulk commodities such as coal, iron ore and manganese — looks like history repeating itself. In the late 2000s, when the resources sector boom caused by China’s rapid industrialisation had been running for about six years, SA’s coal and iron-ore companies could not take full advantage of high prices because of constrained rail and port capacity. At this stage, mining companies are not yet worried because they are not convinced the upturn in prices is sustainable and there is little appetite for investing in large expansion projects. In response to the most recent bottlenecks, Transnet launched a market-demand strategy in 2012, aiming to invest about R300bn over seven years in its infrastructure.About R50bn was earmarked for coal to bring volumes on the Richards Bay Coal Terminal (RBCT) line to 98-million tonnes (Mt) a year, from 68Mt, and iron ore to 83Mt, from 53Mt. In 2010, th...
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