Thungela Resources, South Africa’s largest exporter of power-station coal, reduced its guidance for shipments this year as rail constraints hamper haulage to ports.
Thungela, a spinoff from Anglo American, is having to cut back even as coal prices rally to records, saying state-owned freight company Transnet SOC is unable to move sufficient volumes by rail.
South Africa’s railroad network is increasingly being hit by cable theft and suffering from a shortage of locomotives.
“In response to Transnet Freight Rail’s inconsistent and poor rail performance we have curtailed production,” Thungela said in a statement. “Thungela’s ability to fully take advantage of the strong price environment in the first half of 2022 was hindered by TFR’s continued underperformance.”
Transnet’s lines are critical for moving bulk commodities such as coal from mines to ports. With some routes hobbled, Thungela has started using trucks, it said. The company cut its 2022 thermal-coal export forecast to between 13 million and 13.6 million tons, from an initial projection of 14 million to 15 million tons.
“We have commenced with trucking volumes between sites in order to further optimize stockpile management and train distribution patterns,” Thungela said. “We have also initiated a trial to assess the viability of trucking coal volumes to ports as an alternative to rail transport.”