Thungela sees ‘limited impact’ from Transnet train derailment

Thungela Resources does not expect a derailment on SA’s main coal export line to significantly impact its operations.

State-owned freight rail operator Transnet was on Tuesday still working to clear the line to Richards Bay, the country’s major coal export port, after two trains collided on Sunday, the utility said. It did not say what caused the accident or when services would be restored.

Transnet said no serious injuries were reported after the incident, but that the disruption of services to Richards Bay would throttle mineral shipments already constrained by locomotive shortages as well as rampant cable theft and vandalism of infrastructure.

"The collision is expected to have limited impact on our operations. We are in regular contact with Transnet and expect an update on when the services will be reinstated in due course," Thungela said in an emailed response to Reuters.

Thungela’s shares were down 1.37% at R141.80 at the close.  

Glencore, another major coal exporter from SA, declined to comment on how the derailment was affecting haulage to port, while Exxaro Resources did not immediately respond to queries.

Transnet has struggled for years to haul commodities to ports due to equipment shortages and maintenance backlogs after decades of under-investment.

This has forced companies such as Thungela and Africa’s biggest iron-ore exporter Kumba Iron Ore to cut production due to limited capacity to transport commodities via rail to port.

Some miners have been moving coal to port by road, a more expensive and environmentally damaging option than rail, but Transnet - which also operates SA’s ports - in November announced curbs on trucks going into the Richards Bay port, citing "unprecedented congestion" on the coastal town’s roads.

Reuters