Botswana and South Africa’s state-owned rail companies pursue financing for the Mmamabula-Lephalale link between the two nations. The railway aims to transport various commodities, including coal.
The Mmamabula-Lephalale link, spanning 113 kilometers (70 miles), will be able to handle 24 million tons annually. It will link to established routes leading to South Africa’s Richards Bay and Mozambique’s Maputo port, which are vital export terminals for bulk minerals.
The expression of Interest revealed that the project will include enhancements to existing facilities, like the Multiple Purpose Terminal at Richards Bay, to handle the higher volumes from Botswana. The operation of the railway will be managed as a public-private partnership by Transnet Freight Rail and Botswana Railways, with no financial contributions from the two governments.
Botswana’s government estimates coal resources to be over 200 billion tons, but the lack of rail-export capacity has hindered the industry’s growth. The country’s two coal mines have primarily relied on truck transport to neighboring nations. South Africa heavily relies on coal for around 80% of its electricity production, and Transnet faces challenges due to disruptions caused by rail infrastructure damage and theft.
Construction cost for the Mmamabula-Lephalale link
State-owned rail companies estimated that the Mmamabula-Lephalale link will cost 3 billion pula ($230 million) . According to the notice, financing the Mmamabula-Lephalale rail link will operate as a continuous service without any stopovers at the South Africa-Botswana border. Once completed, the rail link is anticipated to bring substantial socioeconomic advantages, including a shift from road to rail transportation.
Transnet Freight’s spokesperson, Bonginkosi Mabaso, stated that the project is not anticipated to encounter funding difficulties, despite the global reluctance towards coal financing. He emphasized that the rail link serves as a regional integration initiative and will transport various commodities apart from coal, indicating its potential for diverse economic benefits.