Transnet and the South African coal unit of mining company BHP Billiton agreed to a 10-year contract for export coal on rail. The agreement makes the Australia-based miner the first major customer to commit to a long-term take-or-pay contract with the South African state-owned freight transport company.
The agreement with BHP equates to a contract value of approximately R2.4 billion (EUR 170.5M) per annum and R24 billion (EUR 1.7B) over the 10 year period.
The agreement with BHP is a massive boost for certainty around Transnet’s capacity expansion programmes on the export coal line. Transnet is adding close to 10 million tonnes in capacity on the line from the current 73 million to 81 million tonnes over the next seven years.
BHP is one of Transnet’s and South Africa’s largest coal exporters.