9. coaltech transport investigation report.pdf

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1

COALTECH

Project 10.1

Coal Transport Investigation

By

Crickmay & Associates (Pty) Ltd.

December 2009


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EXECUTIVE SUMMARY

Coaltech commissioned an independent coal transport investigation to identify alternative transport modes and

technologies, with the aim of determining which technologies are best suited for specific coal transport requirements.

These transport requirements may vary according to the lead distance, terrain, throughput requirements and

geographical location, to name but a few factors. It is the intention of the study however, to provide guidance on a very

high level, in terms of selecting the most appropriate technology that would best satisfy these requirements in a cost

effective and safe manner, while minimising any negative socio-economic impacts.

This coal transport research was based on a hybrid research strategy. The first stage comprised a phenomenological

based, inductive approach to evaluating the literature available on different coal transport technologies, but moreover

to conduct primary evaluative research into the subject. The second positivist based, deductive approach includedprimary research, based on the outcome of the first stage, aimed at fully evaluating, understanding and quantifying the

characteristics, capacities, costs and socio-economic impacts of each transport mode. Due to the research being

based on this hybrid strategy, it required a multi-method data gathering approach, which included focused desktop

research and more than 15 general interviews with various senior managers from a number of different organisations

within the coal and transport industries. Based on the initial information garnered, selected technology modal

specialists were targeted for in-depth interviews, further data gathering, cross referencing and validation. In total, 16

specialist interviews and targeted discussions were completed.

Different transport options are generally classified into modes, based on the infrastructure that is required to enable

such transport. Similar guidelines have been used during this coal transport investigation and the 18 identified

transport modes were grouped as indicated inTable 1below.

Table 1: Available Transport Modes

Transport Mode In Commercial Use Feasible in SA

Road Based Transport Options

Current Road Transport Yes Yes

Quantum 1 Road Transport Yes Yes

PBS Vehicles Yes Yes

Roadtrains Yes Yes

Rail Based Transport Options

General Freight Rail Transport Yes Yes

Heavy Haul Rail Transport Yes Yes

Magnetic Levitation Systems Not for Freight No

Pipeline and Tube Based Transport Options

Coal Log Pipelines No To Be Validated

Slurry Pipelines Yes To Be Validated

Tube Freight Transportation System Not for Bulk Materials No

Continuous Articulated Rail in a Tube (CARIAT) No To Be Validated

Conveyor and Cable Transport Options

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Transport Mode In Commercial Use Feasible in SA

Overland Conveyor Systems Yes Yes

Aerial Ropeway Systems Yes Yes

Rope Conveyor Systems Yes Yes

Combination Transport Options

Rail-Veyor System Yes Yes

Bimodal Transport Options Yes Yes

Other Transport Options

Water Based Transport Options Yes No

Air Transport Options Yes No

Eleven of these identified transport options are already being used commercially and are applicable under South African

conditions,while a further three options need further evaluation and testing before a definitive answer can be provided.

To accurately compare transport modes against each other, it was imperative that these technologies be evaluated

using the same criteria. To achieve this objective, the evaluation criteria were structured according to the physical

system characteristics, the socio-economic impacts of each system, its local applicability and any further research

requirements that were uncovered. In order to coherently report on and logically compare each option, based on these

criteria, the completed evaluation matrices for the physical system characteristics, the system capacities and the

socio-economic impacts can be viewed under section 9 of this document. The subsequent section 10 contains the

evaluation from a capital, operating and maintenance cost perspective. Section 11 then presents the cost

comparisons, based on the transport unit cost, at various lead distances ranging from 1 to 1,000 kilometres, based onthree distinct freight volume scenarios of 1, 5 and 50 Million Tonnes per Annum (MTPA), respectively. This comparison

is summarised and the transport options are ranked in order of economic competitiveness in Table 2below.

Table 2: Summary of Feasible Transport Options per Scenario

SHORT (


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INTERMEDIATE (10 - 100 KM)

Scenario ARank

Scenario BRank

Scenario CRank

1 MTPA 5 MTPA 50 MTPA

Heavy Haul Rail (Current Rates) 1 Rail-Veyor 1 Conveyor 1

PBS Vehicles (48 t) 2 Heavy Haul Rail (Current Rates) 2 Pipe Conveyor 2

Quantum 1 Road (38 t) 3 Roadtrain (180 t) 3 Rail-Veyor 3

GFB Rail (Current Rates) 4 Conveyor 4 Rope Conveyor 4

Roadtrain (180 t) 5 Coal Log Pipeline 5 Coal Log Pipeline 5

Roadtrain (105 t) 6 Roadtrain (105 t) 6 Roadtrain (180 t) 6

Current Road (31 t) 7 PBS Vehicles (48 t) 7 Heavy Haul Rail (Current Rates) 7

Coal Log Pipeline 8 Aerial Ropeway 8 Roadtrain (105 t) 8

Rail-Veyor 9 GFB Rail (Current Rates) 9 Heavy Haul Rail (Private) 9

Conveyor 10 Pipe Conveyor 10 PBS Vehicles (48 t) 10

Aerial Ropeway 11 Quantum 1 Road (38 t) 11 GFB Rail (Current Rates) 11

Pipe Conveyor 12 Slurry Pipeline 12 GFB Rail (Private) 12

Slurry Pipeline 13 Current Road (31 t) 13 Quantum 1 Road (38 t) 13

GFB Rail (Private) 14 Heavy Haul Rail (Private) 14 Slurry Pipeline 14

Heavy Haul Rail (Private) 15 GFB Rail (Private) 15 Current Road (31 t) 15

Rope Conveyor 16 Rope Conveyor 16 Aerial Ropeway 16

LONG (100 - 1,000 km)

Scenario ARank

Scenario BRank

Scenario CRank

1 MTPA 5 MTPA 50 MTPA

Heavy Haul Rail (Current Rates) 1 Heavy Haul Rail (Current Rates) 1 Coal Log Pipeline 1

GFB Rail (Current Rates) 2 Coal Log Pipeline 2 Rail-Veyor 2

Coal Log Pipeline 3 Slurry Pipeline 3 Heavy Haul Rail (Current Rates) 3

PBS Vehicles (48 t) 4 GFB Rail (Current Rates) 4 Slurry Pipeline 4

Quantum 1 Road (38 t) 5 Rail-Veyor 5 Heavy Haul Rail (Private) 5

Roadtrain (180 t) 6 Roadtrain (180 t) 6 GFB Rail (Current Rates) 6

Current Road (31 t) 7 PBS Vehicles (48 t) 7 GFB Rail (Private) 7

Slurry Pipeline 8 Roadtrain (105 t) 8 Roadtrain (180 t) 8

Roadtrain (105 t) 9 Quantum 1 Road (38 t) 9 Roadtrain (105 t) 9

Rail-Veyor 10 Current Road (31 t) 10 PBS Vehicles (48 t) 10

GFB Rail (Private) 11 GFB Rail (Private) 11 Quantum 1 Road (38 t) 11

Heavy Haul Rail (Private) 12 Heavy Haul Rail (Private) 12 Current Road (31 t) 12

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The individual transport modes were ranked per lead distance segment for each of the three volume scenarios and thenaveraged per distance grouping, which resulted in the overall ranking indicated in Table 2. From Table 2 it is possible

to ascertain which transport mode, based on cost only, is themost competitive option at a given lead distance and for a

specified product throughput.

It should be noted that six transport options, which are applicable to the Medium lead distance applications, were

omitted from Table 2 for the Short lead distance applications below 10 km, as these rail and pipeline type options are

simply not competitive at such short distances. Similarly, four transport options were also omitted from the Long lead

distance applications above 100km,as conveyor type technologies are not practically suited to such long distances.

The outcome of the research broadly conformed to expectations, where conveyor type technologies are suitable across

shorter lead distances, with the flexibility and scalability of road transport ensuring that it remains an option in most

applications. The different versions of rail transport further indicated that it is very competitive at intermediate to long

lead distances, while the pipeline based technologies also seemed to be an option at mid-volume and long lead

distance applications. The most surprising outcome of this research, however, is the comprehensively competitive

possibilities of the Rail-Veyor system, which proved to be the only technology that was competitive under every single

scenario. However, the selection of a specific transport mode is not a simple economic calculation, but rather a

complex decision based on various influencing factors including the availability of infrastructures, individual system

characteristics, system integration possibilities and various socio-economic implications.

The main conclusion from this research is therefore that no single transport technology exists that could cost effectively

satisfy all the divergent transport requirements, across all distances, at different volumes and across all types of terrain.

The optimum coal distribution solution lies in the effective combination of all the available transport options into an

integrated and well managed network, where individual technologies are applied on merit. This approach allows forthe safest and most cost effective transport application for each individual route, with the lowest socio-economic

impact, while protecting and enhancing the available transport infrastructure.

The research was conducted at a very high level and intentionally kept as generic as possible. The results are valuable

and adequate for guiding selected transport and distribution related decisions, in cases where the lead distance, basic

geography and product volumes are known. However, a logical next step in this field of research would be to

investigate the integrative and cooperative approaches that could be followed to improve distribution productivity,

efficiency, reliability and cost effectiveness of the coal supply chain at an industry level. The introduction of an industry

wide supply chain network optimisation initiative and the establishment of coal hubs are two possible options to

achieve this level of cooperation, which warrants further investigation.

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E X E C U T I V E S U M M A R Y


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1. BACKGROUND AND PROBLEM DEFINITION.............................................................. 1

2. PROJECT OBJECTIVE ................................................................................................... 1

3. PROJECT SCOPE.......................................................................................................... 2

3.1 SCOPE INCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

3.2 SCOPE EXCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

4. RESEARCH DELIVERABLES........................................................................................... 2

5. RESEARCH METHODOLOGY........................................................................................ 3

5.1 PRIMARY EVALUATIVE RESEARCH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

5.2 GENERAL INTERVIEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

5.3 SPECIALIST INTERVIEWS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

5.4 RESEARCH PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

6. RESEARCH EVALUATION CRITERIA............................................................................. 4

6.1 EVALUATION MATRIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

6.2 SCENARIO DEFINITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

7. COAL MINING AND DISTRIBUTION IN SOUTH AFRICA ............................................. 6

7.1 COAL MINING AND CONSUMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

7.2 LOCAL COAL TRANSPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

7.3 IMPACT ON AVERAGE LEAD DISTANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

8. SUMMARY OF AVAILABLE COAL TRANSPORT TECHNOLOGIES.................................. 9

8.1 ROAD BASED TRANSPORT OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

8.1.1 Current Road Trucks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

8.1.2 Quantum1 Road Trucks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

8.1.3 Performance Based Standard Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

8.1.4 Roadtrains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

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8.2 RAIL BASED TRANSPORT OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

8.2.1 Conventional Rail Transport. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

8.2.2 Magnetic Levitation Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

8.3 PIPELINE AND TUBE BASED TRANSPORT OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . 20

8.3.1 Coal LogPipelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

8.3.2 Slurry Pipelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

8.3.3 Tube Freight Transportation Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

8.3.4 Continuous Articulated Rail in a Tube . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

8.4 CONVEYOR AND CABLE TRANSPORT OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 248.4.1 Overland Conveyor Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

8.4.2 Aerial Ropeway Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

8.4.3 Rope Conveyor Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

8.5 COMBINATION TRANSPORT OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

8.5.1 Rail-Veyor System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

8.5.2 Bimodal TransportOptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

8.6 OTHER TRANSPORT OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

8.6.1 Water Based TransportOptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

8.6.2 Air TransportOptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

9. HIGH LEVEL RESEARCH FINDINGS............................................................................. 35

9.1 SYSTEM CHARACTERISTICS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

9.2 SYSTEM CAPACITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

9.3 SOCIO-ECONOMIC IMPACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

10. HIGH LEVEL COST COMPARISONS ............................................................................. 42

10.1 ESTIMATED CAPITAL COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

10.2 ESTIMATED OPERATIONS AND MAINTENANCE COSTS. . . . . . . . . . . . . . . . . . . . . . . . . 43

11. SCENARIO BASED TRANSPORT UNIT COST COMPARISONS....................................... 44

11.1 SCENARIO A: 1 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

11.2 SCENARIO B: 5 MTPA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

11.3 SCENARIO C: 50 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

11.4 COST COMPARISON CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

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12. FURTHER RESEARCH REQUIRED.................................................................................. 54

12.1 INDIVIDUAL TRANPORT MODES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

12.2 SECOND STAGE DETAILED RESEARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

12.3 COAL SUPPLY CHAIN INTEGRATION AND OPTIMISATION. . . . . . . . . . . . . . . . . . . 56

12.3.1 Industry Wide Coal Supply Chain Network Optimisation . . . . . . . . . . . . . . . . . . . . . . 57

12.3.2 Inland Coal Terminals, Hubs or Pantries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

13. CONCLUSION AND RECOMMENDATIONS ................................................................. 59

APPENDICES

Appendix A: Unit Cost Comparison - 1 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Appendix B: Unit Cost Comparison - 5 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Appendix C: Unit Cost Comparison - 50 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Appendix D: Road Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Appendix E: Roadtrains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Appendix F: Rail Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135Appendix G: Coal Log Pipelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

Appendix H: Slurry Pipelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

Appendix I: Troughed and Pipe Conveyor Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

Appendix J: Aerial Ropeway Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211

Appendix K: Rope Conveyor Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229

Appendix L: Rail-VeyorTM Transport System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249

Appendix M: Barging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271

Appendix N: Deep Sea Shipping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279

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INDEX OF FIGURES

Figure 1: Typical Road Damage Caused by Overloaded Coal Trucks . . . . . . . . . . . . . . . . . . . . . . 1

Figure 2: Research Evaluation Criteria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Figure 3: Map of South Africa and Location of Eskom Power Stations . . . . . . . . . . . . . . . . . . . . . . 6

Figure 4: Current Coal Trucks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Figure 5: RTMS Accredited Sign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Figure 6: Example of a Timber PBS Vehicle with a 46 t Payload Capability . . . . . . . . . . . . . . . . . . . 13

Figure 7: Example of a Coal Roadtrain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Figure 8: Off-road Roadtrain Transporting and Offloading Coal . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Figure 9: Coal Train Headed for the Richards Bay Coal Terminal . . . . . . . . . . . . . . . . . . . . . . . . . 17

Figure 10: Maglev High Speed Passenger Train . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Figure 11: Maglev Cargo Transport Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Figure 12: Compressed Coal Logs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Figure 13: Schematic Depiction of Tube Freight Transport Systems . . . . . . . . . . . . . . . . . . . . . . . . . 22

Figure 14: The CARIAT System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Figure 15: Schematic Layout of a Typical Troughed Conveyor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Figure 16: Transition Idlers on a Pipe Conveyor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Figure 17: Aerial Ropeway System Crossing a Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Figure 18: Rope Conveyor System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Figure 19: Example of a Rail-Veyor Vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Figure 20: Bimodal Rail Bogie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Figure 21: Bimodal Train of Semi-Trailers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Figure 22: Open Top Container on a Back Tipper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Figure 23: Transport Unit Cost for All Modes - 1 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Figure 24: Transport Unit Cost at Short distances - 1 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Figure 25: Transport Unit Cost at Intermediate Distances - 1 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . 46

Figure 26: Transport Unit Cost at Long Distances - 1 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Figure 27: Transport Unit Cost for All Modes - 5 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Figure 28: Transport Unit Cost at Short Distances - 5 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Figure 29: Transport Unit Cost at Intermediate Distances - 5 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . 48

Figure 30: Transport Unit Cost at Long Distances - 5 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Figure 31: Transport Unit Cost for All Modes - 50 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Figure 32: Transport Unit Cost at Short Distances - 50 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Figure 33: Transport Unit Cost at Intermediate Distances - 50 MTPA . . . . . . . . . . . . . . . . . . . . . . . . 51

Figure 34: Transport Unit Cost at Long Distances - 50 MTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

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INDEX OF TABLES

Table 1: Evaluation Category Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Table 2: Impact on Average Lead Distances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Table 3: Summary of System Characteristics - Road and Rail Based Transport Options. . . . . . . . . . 36

Table 4: Summary of System Characteristics - Pipeline, Tube, Conveyor, Cable and Combination

Transport Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Table 5: Summary of System Capacities - Road and Rail Based Transport Options. . . . . . . . . . . . . 38

Table 6: Summary of System Capacities - Pipeline, Tube, Conveyor, Cable and Combination Transport

Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Table 7: Summary of Socio-economic System Impacts - Road and Rail Based Transport Options . . 40Table 8: Summary of Socio-economic System Impacts - Pipeline, Tube, Conveyor, Cable and

Combination Transport Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Table 9: Summary of System Capital and Operations Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Table 10: Comparative System Design Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Table 11: Number of Trucks Required per Scenario. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Table 12: Summary of Feasible Transport Options per Scenario. . . . . . . . . . . . . . . . . . . . . . . . . . . 53

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DOCUMENT DETAILS

Table I: Document Details

Project Title Coaltech Transport Investigation

System Final Report

Document Issue Date 30/09/2009

Client Reference Task 10.1

APPROVAL

Table II: Document Approval

Checked Name Signature Date

Author R Barnard 30/09/2009

Technical Approval J Lane 30/09/2009

Coaltech J Beukes 26/11/2009

VERSION CONTROL

Table III: Document Version Control

Version # Date Authorisation Author Description

1 30/09/2009 J Lane R Barnard First Draft

2 26/11/2009 J Beukes R Barnard Final Report

SUPPORTING DOCUMENT DETAILS

Table IV: Supporting Document Details

Project Title Coaltech Transport Investigation

System COALTECH_Crickmay Proposal_Final 240409

Document Issue Date 24/04/2009

Client Reference Task 10.1

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1. BACKGROUND AND PROBLEM DEFINITION

It is estimated that approximately 50 million tonnes of coal was transported by road during the last year,

predominantly in the Witbank, Middelburg and Bethal areas of Southern Mpumalanga. Due to the large volumes

of coal being moved, road damage has escalated rapidly (Figure 1). Because of problems associated with

transport and rising costs, the coal industry is coming under increasing pressure to find alternative modes of coal

transport that will be viable and sustainable.

The aforementioned scenario is further complicated in that the current coal reserves are nearing depletion. It is

envisaged that new coal reserves will be unlocked from other areas within South Africa, including the Waterberg

area, some 400 km away from the current mining activity. Furthermore, these new reserves would have to be

transported to, amongst others, the Southern Mpumalanga area to sustain the production of several Power

Stations, as well as to export terminals such as Richards Bay.

In light of this, Coaltech requested an independent coal transport study to identify alternative transport modes and

technologies, with the aim of determining which technologies are best suited to specific transport requirements.

These transport requirements may vary according to the lead distance, terrain, throughput requirements and

geographical location, to namebut a few factors. It is the intention of the study, however, toprovide guidance on a

very high level, in termsof selecting themost appropriate technology that wouldbest satisfy these requirements in a

cost effective and safe manner, while minimising any negative socio-economic impacts.

2. PROJECT OBJECTIVE

The objective of this project is to produce a study on alternative coal transport modes that could be employed by

the coal industry, so that the following needs are fulfilled:

i. Provide the Chamber of Mines Colliery Committee with information to support their policy decisions with

respect to coal transportation.

ii. To test the feasibility and applicability of suggested transport modes at various distances.

iii. To highlight transport modes that may require further research and investigation.

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3. PROJECT SCOPE

The project scope takes into consideration the problem definition and objectives of the study. In essence, a high

level desktop study and primary research is to be conducted, subject to the following scope inclusions and

exclusions.

3.1 SCOPE INCLUSIONS

The following aspects are included in the scope of this project:

Conducting desktop and primary research into alternative transport options, their characteristics,

advantages, disadvantages, costs and socio-economic impacts;

Investigating the applicability and feasibility of each coal transport mode suggested;

Comparing the identified transport options against the same evaluation criteria;

The production of an interim and final bound report to be reviewed and approved by the Coaltech

Technical Committee.

3.2 SCOPE EXCLUSIONS

The project is intended to provide an independent high level view, and specific scope exclusions are as

follows:

Determining the best transport option for specific applications, routes or destinations.

The investigation into the optimisation of the current coal transport network.

The recommendation of specific infrastructural investments.

4. RESEARCH DELIVERABLES

The physical deliverables for the project include the following:

a) The production and submission of an interim research report to be reviewed by the Coaltech Technical

Committee;

b) The production and submission of a final bound research report containing the findings of the study, to

be approved by Coaltech.

The contents of the final research report will be focused on addressing the following requirements:

a) To provide a list of all available coal transport options.

b) To provide an indicationof the feasibility andapplicability of each transport option at various distances.

c) To highlight novel transport options that might need further research and investigation.

d) To provide a completed evaluation matrix that compares all the identified transport options against each

other, based on a set of predefined evaluation criteria.

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5. RESEARCH METHODOLOGY

This coal transport research was based on a hybrid strategy. The first stage comprised a phenomenological

based, inductive approach in evaluating the literature available on different coal transport technologies, but

moreover to conduct primary evaluative research into the subject. The second positivist based, deductive

approach included primary research, based on the outcome of the first stage, aimed at fully evaluating,

understanding and quantifying the characteristics, capacities, costs and socio-economic impacts of each

transport mode from a desktop perspective.

Due to the research being based on this hybrid strategy, it required a multi-method data gathering approach.

The majorbenefit of this approach was that it provided the research team with a comprehension of the important

issues to be considered, before embarking on an expanded data collection campaign.

5.1 PRIMARY EVALUATIVE RESEARCH

The primary evaluative research consisted mainly of focused desktop research into the available

transport options in the coal industry, and also in related bulk industries. Literature included internet

searches, books, magazines, journal articles, white papers and various industry publications.

5.2 GENERAL INTERVIEWS

Interviews are classified as one of the best techniques to obtain primary data and detailed information.

Consequently, it was decided to conduct general, structured interviews with various senior managers,

from mainly supply chain and logistics departments, within a number of different organisations.

These interviews proved to be extremely valuable in confirming the research objectives, steering further

research and identifying technology and modal specialists that could be contacted for subsequent

specialist interviews. In total, 15 general interviews were conducted.

5.3 SPECIALIST INTERVIEWS

Based on the initial information gathered from the primary desktop research and the general interviews,

selected technology and modal specialists were targeted for in-depth interviews, further data gathering,

cross referencing and validation. In total, 16 specialist interviews and targeted discussions were

completed.

5.4 RESEARCH PARTICIPANTS

To maintain an objective view and to cross reference specific information obtained, research

participants were identified and selected accordingly. These participants therefore included individuals

from various Coaltech member companies, as well as numerous companies that are active throughout

the entire coal supply chain, including coal producers, logistics service providers and consumers. Lastly,

research participants also included academics, independent research organisations and technology

vendors.

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6. RESEARCH EVALUATION CRITERIA

In order to accurately compare the potential of each transport mode, it is imperative that these technologies are

evaluated against the same criteria. To achieve this objective, the principles of the model depicted inFigure 2

were used as a guideline.

The physical parameters firstly included basic system characteristics, focusing on system components,

advantages, disadvantages and restrictions around operating conditions. Secondly achievable throughput and

unit load capacities were evaluated, while lastly the capital, operational and maintenance costs of each system

were investigated.

The investigation also looked at the socio-economic impact of each system, focusing on environment, health

and safety, social aspects and the local and national economy. Within this research framework, transport

options were also further evaluated with regards to their local applicability, given certain natural and

infrastructural restrictions within South Africa.

The last focus area included the identification of novel transport options that might require further research and

investigation, and to comment on advanced research requirements for current operational systems.

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6.1 EVALUATION MATRIX

Table 1provides a brief summary of the evaluation categories.

Table 1: Evaluation Category Summary

No Category Description

1 Cost Capital Investment Cost

Operating Cost

Maintenance Cost

2 Capacity Capacity per Unit

Maximum Transport Capacity

Throughput Rate (hourly/daily)

Material / Article Size Restrictions

Minimum / Optimum / Maximum Transport Distances

3 System Characteristics Advantages

Disadvantages

Optimum Operating Conditions

Geographical Layout Requirements / Terrain / Typography

4 Safety Impact Public Safety

Operator Safety

5 Health Impact Public HealthOperator Health

6 Environmental Impact Environmental Impact / Damage

Possible Pollution

7 Social Impact Displacement of Settlements

Restriction of Movement

Prevention of Normal Land Usage

8 Economic Impact Possible Job Creation Opportunities

Impact on Economy of the Area

9 Further Research Required Current State of Technology

Fundamental ResearchTesting / Pilot Applications

Estimated Research Cost and Duration

6.2 SCENARIO DEFINITION

Based on the evaluation criteria described in Table 1, the basic system characteristics and

socio-economic impacts will remain constant, regardless of the transport lead distance or the annual

freight throughput rates. However, total costs and transport unit costs will change dramatically where

lead distances and throughput rates are adjusted.

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In this light, each transport option was evaluated against the same criteria, measured against predefinedlead distances ranging from 1 to 1,000 km, as well as against throughput rates of 1, 5 and 50 Million

Tonnes per Annum (MTPA), respectively.

7. COAL MINING AND DISTRIBUTION IN SOUTH AFRICA

To identify and evaluate suitable technologies for the transportation of coal throughout South Africa, it is

important to understand the current and future mining and distribution activities within the country. This will

assist in identifying major corridors, as well as approximated volumes, sources, destinations and resulting lead

distances. The following sections briefly expand on this notion andcontinually refer back to the map in Figure3.

7.1 COAL MINING AND CONSUMPTION

South Africa's indigenous energy resource base is dominated by coal. Internationally, coal is the most

widely used primary fuel, accounting for approximately 36% of the total fuel consumption of the world's

electricity production. In comparison, approximately 77% of South Africa's primary energy needs are

provided by coal. This is unlikely to change significantly in the next few decades, primarily due to a

relative lack of availability and investment in suitable alternatives. Historically, many of the local coal

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deposits could be exploited at extremely favourable costs and, as a result, a large coal mining industrydeveloped within the country.

During 2008, approximately 253 million tonnes of coal was mined in South Africa, with just over 70%

of this coal sold into local markets. Local markets are dominated by the energy sector, which constitutes

approximately 60% of the total local demand. Other local demand sectors include the petrochemical

industry, metallurgical industry, cement industry, general industry and local merchants.

In addition to the extensive use of coal in the domestic economy, almost 30% of South Africa's coal

production is exported, mainly through the Richards Bay Coal Terminal, on the northern coast as

indicated inFigure 3. Smaller volumes of coal are also being exported through the ports of Durban on

the south coast and Maputo in Mozambique. This makes South Africa the fourth-largest coal exporting

country in the world.

South Africa's coal is obtained from collieries that range from among the largest in the world to

small-scale producers. As a result of many new entrants, operating collieries increased dramatically

during the past 10 years, with more than 80% of the total coal mined emanating from the Mpumalanga

province. However, these reserves are rapidly being depleted and alternative coal fields need to be

unlocked to satisfy current and future demands.

One of the most prominent new supply areas will be the Waterberg Coal Field in the Limpopo province.

This coal field starts just west of the town of Lephalale, shown in Figure 3, stretching for 40 km from

north to south and 88 km from east to west and then into Botswana. This coal field has estimated 300

year reserves, with 75.7 billion tonnes of in situ inferred resources, 85% of which are extractable.

Approximately 65% of this coal production would be used for power generation and the remainderwould be available for other markets, including exports.

7.2 LOCAL COAL TRANSPORT

Considering that the energy and petrochemical sectors use approximately 85% of the coal produced

locally and the fact that more than 60 million tonnes of export coal travels through Richards Bay, it is

clear that these two areas warrant the primary focus of further investigations.

At present, the majority of South African coal fired power stations are located in Mpumalanga, with 11

operational stations, as indicated on the map in Figure 3, and a twelfth station under construction, also

in this province.

There is one coal fired power station in Gauteng, just outside the town of Vereeniging, and another two

stations in Limpopo, just outside Lephalale, one operational and one being constructed. The total

consumption of these power stations is approaching120 MTPA and they will remain in operation for the

foreseeable future. For the Mpumalanga based power stations in particular, coal will have to be

transported across much longer lead distances after the current coal fields have been depleted.

To transport the coal from the various mines to the power stations, most companies use conveyor belts

for short distances, rail transport wherever possible and road transport for the remainder.

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With regards to the Richards Bay Coal Terminal (RBCT), approximately 61.8 million tonnes of coal wasexported through this port in 2008, with an expected export volume of 65 million tonnes for 2009.

RBCT currently has an estimated export capacity of 76 MTPA, soon to be increased to 91 MTPA.

However, due largely to logistics constraints into the port, it is unlikely that these capacities will be filled.

The main mode of transport into the RBCT is undoubtedly the CoalLink rail line, running from Blackhill,

Mpumalanga, through KwaZulu-Natal, into Richards Bay, across a total distance of 580 km. This line is

capable of transporting approximately 72 MTPA and Transnet Freight Rail indicated that the capacity

will be upgraded to 81 MTPA by June 2010.

7.3 IMPACT ON AVERAGE LEAD DISTANCES

From the previous sections it is clear that there are two major areas of coal movement within SouthAfrica. The first is an intricate network of coal supply, via conveyor, road and rail, from a number of

mines, to 12 power stations in the Mpumalanga area. The second is the CoalLink export rail line

running out of Mpumalanga into Richards Bay.

Given that these two areas will at least sustain current demand well into the future, it is worth

investigating what the potential impact would be if the major coal source moved from its current

concentration in Mpumalanga, primarily into the Waterberg Coal Field in Limpopo province.

Based on available information, the overall weighted average one-way lead distance between the

various sources and destinations was calculated for coal moving from the respective mines into the two

areas described above. These estimated current average lead distances are given inTable 2.

For the purposes of estimating the impact on lead distances if the majority of coal is supplied from the

Waterberg Coal Field, it is roughly assumed that the coal will need to be transported from Lephalale to

approximately the Ogies area in Mpumalanga, across a lead distance of approximately 375 km along

existing roads, while the minimum achievable straight line distance is approximately 295 km. From here

the coal could then theoretically be distributed via the same current supply network. When this

additional lead distance is added to the current lead distance, the estimated new average lead

distances are also given inTable 2.

Table 2: Impact on Average Lead Distances

Transport Mode Current WeightedAverage LeadDistance (km)

Expected New LeadDistance (km)

Net Effect (%)

Conveyor < 5 Undetermined Undetermined

General Rail 320 695 + 117%

Road 110 485 + 340%

CoalLink Line 580 955 + 65%

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It should be noted that, although the above table is based on rough calculations and estimates, it doeshighlight the fact that the impact of the additional lead distance between Lephalale and Mpumalanga is

substantial and that the cost implication should not be ignored. The coal industry will have to find

alternative transport options to maintain their competitiveness.

It should also be noted that, although the major impact is at a very long lead distance level, it does not

negate the necessity to optimise transport at short to medium distances as well. The remainder of this

report will therefore focus on transport options across all lead distances and not just over long haul

routes.

8. SUMMARY OF AVAILABLE COAL TRANSPORT TECHNOLOGIES

Transportation constitutes the physical movement of people and goods from one location to another and is

generally classified into modes, such as air, rail, road, water, cable, pipeline and space. The individual modes

can then be further subdivided into the infrastructure, vehicles and operations that are required to effectively

enable transportation via the selected mode. Similar guidelines have been used during this coal transport

investigation and the following paragraphs expand on the characteristics of such grouped transport modes.

During the research, most available transport options were identified, regardless of whether such options were

feasible or not. The following sections will briefly touch upon each option,while themore feasible options will be

discussed in more detail in subsequent sections of this report, as well as in the relevant appendices.

8.1 ROAD BASED TRANSPORT OPTIONS

Road transport is classified as the transportationof passengers or freight viaa land based road network,

using wheeled vehicles. The nature of road transportation of goods depends, apart from the degree of

development of the local infrastructure, on the distance the goods are transported by road, the weight

and volume of the individual shipment and the type of goods transported. The following sections briefly

expand on each road based transport option.

8.1.1 Current Road Trucks

Road transportation together with rail transportation accounts for 99% of South Africa's global logistics

costs, with road transportation the dominant mode. The road network infrastructure is shared by heavy

vehicles used for the conveyance of freight, light delivery vehicles and the general public in the form of

motor cars and panel vans. The total live vehicle population, as published by E-Natis, is estimated at

8.47 million motorised vehicles of which approximately 320,000 are defined as heavy load vehicles

with a Gross Vehicle Mass (GVM) in excess of 3,500 kg. It is further estimated that the aforementioned

complement of heavy load vehicles travelled up to 12,961 million km during 2008.

Road transportation, as commonly found in bulk materials handling, is comprised of two major

components mainly the vehicle combination and the road upon which it moves. Due to the large scale

usage of heavy motor vehicles to convey freight and its importance to any economy, much emphasis

has been placed on the improved movement and handling of freight by various types of vehicle

combinations via road. This section focuses mainly on current coal truck configurations, as indicated in

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Figure 4, while the following three sections focus on alternative modes of road transport. Roadtransport is further discussed in significant detail inAppendix D.

Road transport in general offers a variety of advantages, with probably the biggest advantage being that

the available vehicle combinations offer high levels of flexibility in changing of routes, as opposed to fixed

infrastructure type transport nodes such as conveyors, rail and pipelines. The response time within which

this can bedone is also very short and is the single biggest advantage overmostother transport modes.

In addition, road transport demands low initial capital costs, which is easily justifiable when the source

of freight has a relatively short life span of less than five years as opposed to conveyors, rail or pipelines

where the capital payback period is often between 15 and 20 years. Lastly, unlike many of the other

transport modes, road transport has typically thousands of transport companies offering services, which

allows for a greater deal of competition in themarket which further reduces operatingcosts, as opposed

to a captive national rail supplier.

The disadvantages of road transport, relative to other transport modes such as rail, conveyers and

pipelines, is that road transport is management and labour intensive, with up to three drivers employed

to operate one vehicle over a 24-hour period. Furthermore, there is a direct correlation between road

roughness and increased vehicle operating costs. Due to the backlog of maintenance on national andprovincial roads, partly due to under-funding and accelerated road wear associated with overloading,

the general condition of the road infrastructure is not ideal. Thus, the operating cost of road transport is

currently elevated beyond what it should be.

The single biggest disadvantage of road transport is the increased operator and public safety risk. Due

to the fact that road transport shares the road infrastructure with the general population, road transport

has a higher risk of accidents than other forms of transport such as conveyors and pipelines where

access can be greatly restricted. This risk increases exponentially as the freight volume increases, which

requires a general increase in the number of vehicles and hence results in a very high vehicle

concentration in certain geographical areas, as is currently the case in southern Mpumalanga.

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The capacity of road transport systems, inter alia its productivity and throughput, has traditionally beenaffected by lead distance, terminal times, road conditions, payloads and scheduling. Current coal truck

configurations are legally capable of carrying between 31 and 33 t payload, depending on vehicle

configuration. In addition, these trucks can operate over a multitude of conditions and scenarios

ranging from very short lead distance of less than five km to in excess of 1,000 km, as is the case with

long haul road freight.

The achievable annual freight throughput rate is generally dependent on these payload capabilities,

combined with the transport lead distance and the state of the road infrastructure. It hasbeen estimated,

however, that approximately 50 million tonnes of coal was transported via road in Mpumalanga during

the past year.

Road transport therefore provides a very flexible distribution option, which imposes a comparatively lowcapital investment requirement, while it is extremely scalable and could justifiably be employed for very

short contract periods. The main concerns around this mode of transport, however, are the increased

safety risk that it presents, and the accelerated deterioration of the public road infrastructure that results

from large numbers of trucks transporting freight in a relatively concentrated area.

8.1.2 Quantum 1 Road Trucks

The payload efficiency of the vehicles currently employed in the coal industry, when compared to other

industries, suggests significant room for improvement. Opportunities to improve the payload through

better truck and trailer design and load cell technology are under investigation in the coal industry, as

further discussed inAppendix D.

This design concept, currently referred to as Quantum 1 road trucks, aims at maximising the legal

payload carrying capability of a coal truck, within the current legal limits. Quantum 1 concept designs

have recently suggested that a legal payload of 38 t is possible, within current legislation.

The Quantum 1 design was conceptualised after trips to Europe and Australia in 2006 by a well

respected trailer design specialist, Mr Desmond Armstrong. Unfortunately, detailed drawings could not

be made available as these are considered confidential. However, two of the larger role players in the

South African coal industry are currently considering testing the theory, by building and operating a few

Quantum 1 trucks on a trial basis.

The system characteristics, advantages and disadvantages of these Quantum 1 vehicles are entirely

similar to the aspects described under normal road trucks in the previous section. The main benefit isthat these Quantum 1 vehicles will remain within the legal road transport framework, therefore being

able to operate on current public roads. The only major difference is a 22% increase in current average

payloads and a 15% increase in legal payloads, which will significantly decrease the transport unit costs

when compared to conventional coal trucks.

8.1.3 Performance Based Standard Vehicles

Performance Based Standards (PBS) is a mechanism designed to improve payloads, subject to

predefined performance criteria that allow approved vehicles to operate beyond what is possible within

current legislation.

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As a general rule across the globe, legislation governing vehicle dimensions in the transportation ofgoods is aimed at ensuring that vehicles operate safely and do not damage the public roads on which

they travel. In some innovative countries such as Sweden, Australia, to a lesser extent Canada, New

Zealand and recently South Africa, mechanisms have been developed to promote a line of thinking that

argues that legislation should not dictate what the vehicle should LOOK like, but rather how it should

PERFORM. This concept is described in significant detail inAppendix D.

The PBS concept in relation to how it is to be applied in South Africa is based on a great deal of work that

has already been done locally, contextualising a very complex subject and learning from the application

of PBS, which varies significantly from country to country. Fortunately, the SA National Department of

Transport (NDoT) hasgivenenough support to allow a standard PBS approach toemerge in South Africa.

In this light, the South African timber industry has pioneered the PBS concept locally, based on the factthat transport is the largest single cost component in the forestry business. Two of the largest companies

within the timber industry, namely Mondi and Sappi, recognised that innovation could not come from

the transporters themselves, but from a sound technical source, which bases its learning on world class

benchmarks.

These companies realised that the demonstration of good governance is the key to creating the

necessary trust with both the public and government, which is ultimately the prerequisite before any

concessions will be granted for operating PBS vehicles on South African roads.

In and around 2001, the timber industry began to

realise the potential of gaining concessions from

government if it could demonstrate its ability to governitself. With the help of the National Productivity

Institute (NPI), Crickmay & Associates, the Department

of Transport (DoT) and the South African National

Roads Agency Limited (SANRAL), the initial industry

specific self regulation work which focused on

overloading was broadened to include driver wellness,

vehicle fitness, productivity andsafetystandards. This later

became known as the Road Transport Management

System (RTMS).

The RTMS is comprised of a set of consignor, consignee and haulier standards that are approved by the

South African National Standards (SANS) as a National Recommended Practice (ARP). These standards

aim to assist the consignor, consignee and haulier in complying with government legislation and are

also designed to work hand-in-hand with the various internal HR and SHEQ systems. This system of self

regulation has lead to vehicles being marked with the sign depicted inFigure 5, to indicate that these

companies and vehicles comply with the standards and are therefore RTMS accredited.

After a long and structured approach, following the principles of RTMS, Mondi and Sappi obtained the

required concessions from the KwaZulu-Natal (KZN) local government, and for the past three years

these companies have each had a PBS unit running in KZN, under abnormal load permits. Based on the

success, licences for 30 new PBS vehicles have been granted.

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Figure 6shows a typical timber haulage vehicle with a 46 t payload capacity.

The biggest advantage of PBS is that these vehicles are allowed to run, under concessions, on public

roads. During the running of the first two PBS vehicles in the timber industry, payload increases of

between 12% and 15% were realised, with an average 25% reduction in transport costs, over a lead

distance of 150 km. A corresponding decrease in the number of vehicles operating should follow the

increase in payload and the introduction of the 30 new PBS vehicles. A significant reduction in carbon

emissions has been recorded in the timber industry, which was achieved through a reduction in theamount of fuel used per tonne of product delivered.

PBS is aimed primarily at increasing the achievable vehicle payload. Based on investigations being

undertaken in the coal and timber industries, it is expected that the current average 31 t payload of coal

trucks can be increased to approximately 48 t, using the PBS guidelines. This has the potential to

significantly decrease transport costs in the coal industry.

The capital investment required for PBS vehicles, relative to existing vehicles, is approximately 31%

more on a per vehicle basis. However, when applying the principle over larger tonnages, the overall

capital required decreases, because fewer vehicles are required as a result of higher payloads. In

comparison, operating and maintenance costs are also reduced, based on lower fuel consumption and

fewer vehicles on the road.

In 2006, the Chamber of Mines advised that Eskom should be approached regarding RTMS; this was

done and in 2007 RTMS was implemented at Eskom, one of the major players in the South African coal

industry. Through Rotran, Eskom's lead logistics provider, Eskom established an industry RTMS

Committee, with the Chamber of Mines having three seats on the coal RTMS committee.

It is imperative to note, however, that RTMS implementation and adherence is a prerequisite for

obtaining licenses for PBS vehicles. The introduction of RTMS at Eskom has shown excellent results.

These results could provide a platform for the mining industry which could ultimately lead to the

commercialisation of PBS vehicles in the coal industry.

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8.1.4 Roadtrains

A Roadtrain is a trucking concept used in remote areas of Argentina, Australia, Mexico, the United

States, Canada and southern Africa to move bulky loads efficiently where little infrastructure exists. A

Roadtrain consists of a relatively conventional prime mover unit, but instead of pulling one trailer,

semi-trailer or interlink combination, the Roadtrain pulls multiple trailers as perFigure 7below.

The Roadtrain transport concept is both highly flexible and versatile and can be deployed on differentroutes very easily with relatively low capital cost, when compared to conveyor or rail infrastructures.

Furthermore, Roadtrains are becoming a common feature in the South African mining landscape for the

efficient transport of raw and beneficiated minerals over distances of between 5 and 100 km.

It needs to be clearly understood that in countries such as Argentina, Australia, Mexico, the United

States and Canada, Roadtrains are permitted to travel on categorised public roads, which is in contrast

to countries like South Africa, Zimbabwe and Swaziland where Roadtrains may only travel on private or

semi-private roads. This distinct difference prevents any direct importation of overseas technology and

therefore direct comparisons are not applicable, as the regulatory environment is vastly different.

However, the concept of increased payloads being transported on dedicated heavy haul roads in order

to decrease the transport unit cost, when compared with conventional road transport, is universally

applicable and is discussed in significant detail inAppendix E.

Two broad categories of Roadtrains exist, namely slightly modified on-road trucks and specifically built

dedicated off-road Roadtrains. The modified Roadtrains are essentially on-road prime movers used for

normal coal transport or abnormal load applications (i.e. same dimensions and components) modified

to accommodate the prolonged slower speeds, increased draft requirements and poorer road surface

conditions.

Most related roadtrain equipment runs on axles and tyres where the axle load seldom exceeds 9,000

kg. The reason for this is that the haul road required does not have to be built to a specification any

higher than national roads, and in certain circumstances in remote areas the government has granted

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permits to run these vehicles on roads also used by the public. Standard payloads of between 105 and180 t are common and, with the assistance of powered trailers, payloads of up to 300 t are feasible and

steeper gradients are able to be negotiated at increased speeds.

Dedicated off-road Roadtrains, as depicted in Figure 8, adopt the advantages of the modified on-road

type Roadtrains, but address the problems of road gradients and reduced payloads at the expense of

being allowed on public roads. These vehicles employ such technology as dedicated 3.5 or 4.0 m wide,

high power and torque prime movers (similar to the Bell and Terex dumpers used in open cast mining)

and individual supplementary engines on trailers. These vehicles can climb gradients in excess of 6%

and can cruise at 80 km/h. Payloads of 200 t (minimum) are common with examples of 400 t

combinations being used in some mining applications.

In South Africa, no specific road rules apply as no Roadtrains are allowed to travel on public roads and

therefore the local or company health and safety rules applicable for transport on private roads will

apply. This underlines the fact that, under South African conditions, excluding the possibility of

obtaining local government concessions, Roadtrains will be confined to private roads or semi-private

roads. This effectively means that companies would be required to build private roads, with the

associated road construction and maintenance cost. Because of these factors, and the inherent

characteristics of Roadtrains, the technology is not feasible at long lead distances in excess of

approximately 200 to 300 km.

There are no theoretical limits on the size of a Roadtrain operation, which means that the number of

Roadtrains in the system will directly influence capacity and throughput and is therefore one of the

significant advantages of the system. However, caution needs to be exercised where a large density of

Roadtrains is operated on a particular route, to prevent vehicle congestion.

In particular, it is crucial that Roadtrains of very similar capacities and capabilities are used otherwise

bunching will obviously occur when lighter Roadtrains catch up with heavier or lower capacity ones. As

an example, in Australia ten Roadtrains in the 200 t class are used at a mine site, at 5 to 10 km lead

distances, and are moving material at a rate of 22 MTPA.

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With regards to the system cost, the capital investment in a private road infrastructure is required, whichwill obviously also include an annual maintenance cost. The potential for variation in the road design

requirements and associated construction costs can vary from as low as R500,000/km to over R8

million/km depending on route conditions, throughput and safety requirements, which significantly

change the sub-layer and road surface specifications. Additional capital will need to be invested in the

vehicles themselves, which will also incur an annual operating and maintenance expense.

At least four Roadtrain projects are currently underway in South Africa. The largest single Roadtrain

operation is at Richards Bay Minerals, where each monthmore than 300 000 t rawmaterial is transported

over an average lead distance of 20 km on private road. The application uses the so-called "A-triple"

comprising a 6x4 truck tractor with five trailers, offering a total payload of between 105 and 110 t, at a

combination length of approximately 45 m, which can safely travel and stop from a cruise speed of 80

km/h. Although travelling on a private road, axle loadings are not designed to exceed the normal 9,000

kg/axle and therefore no special road designs were required. Another Roadtrain operation conveys lead,

zinc and copper concentrate by road to the Loop 10 siding of the Sishen-Saldanha railway line. The

operation involves a number of vehicles operating 24 hours daily, seven days per week under abnormal

permit authority on a semi-private road, of which 149 km is gravel. Roadtrains are also used to transport

zinc ore at the Black Mountain Mine Project near Aggeneys in the Northern Cape.

Roadtrain technology is sufficiently developed and tested to provide an extremely flexible, reliable, low

risk, high throughput transport optionat short to medium distances where no formal road, rail or conveyor

type infrastructure is available. The technology is therefore ideally placed to fill the transport gaps between

sources or coal pantries and high volume users, which are located a relatively short distance away.

8.2 RAIL BASED TRANSPORT OPTIONS

Rail transport is the conveyance of passengers and goods by means of wheeled vehicles, generally

referred to as trains, running along fixed railways or railroads. Rail has historically formed a vital link in

the logistics chain of any country, facilitating both trade and economic growth. Most rail systems serve a

number of functions on the same track, carrying local, long distance and commuter passenger and

freight trains, which decreases the capital cost apportioned to each train, thereby in turn increasing the

economic attractiveness of this transport mode.

The following paragraphs expand briefly on each rail transport option, whileAppendix Fcovers this

mode of transport in detail.

8.2.1 Conventional Rail Transport

Conventional rail transport(Figure 9)is statistically the safest form of transport when compared to any

other form of land transport and is generally proven to be capable of high throughput rates. Rail

transport is very energy efficient, but lacks flexibility and is extremely capital intensive.

Because of the reduced friction between rail tracks and train wheels, rail transport is very sensitive to

gradients. Furthermore, because of the narrow gauge system used in South Africa, trains become

unstable at high speeds, which impacts on the minimum achievable radius of turns and bends in a rail

line, which is a distinct disadvantage on undulating and winding routes.

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The payload capability of a freight train depends on the type of wagon being used, and also on the type

of rail line on which the train travels. Under South African conditions, the majority of the country's rail

lines are for general freight purposes and often referred to as General Freight Business (GFB). These

lines are designed to carry rail wagons with maximum axle mass loads of 18, 20 or 22 t. With four axles

per wagon, this equates to 72, 80 or 88 t per wagon of gross mass.

In comparison, heavy haul lines are constructed for the transportation of high volume freight on a

dedicated rail line. Two such major heavy haul lines exist in Southern Africa: the Mpumalanga toRichards Bay CoalLink Line, and the Sishen-Saldanha Iron Ore Line. These lines are designed to carry

rail wagons with maximum axle mass loads of approximately 26 t. With four axles per wagon, this

equates to 104 t per wagon of gross mass, which is significantly higher than GFB lines.

The maximum achievable operating capacity or throughput rate of a rail transport system depends

entirely on the design characteristics of the system itself. This capacity is largely dominated by the

payload carrying capability of the system, the capacity of the physical infrastructure as well as the

transport lead distance. It is not uncommon, however, for rail transport systems to deliver in excess of

100 MTPA. In addition, rail remains competitive at extremely long distances, with the world's longest

railway being the Trans-Siberian Railway in Russia, which is 9,297 km long.

The capital investment requirements of a rail system are generally very high and are comprised firstly ofthe establishment of a physical rail infrastructure, consisting of the railway line, signalling systems,

telecommunications and so forth, which forms the route along which freight will be transported. The

second element is the rolling stock, including locomotives and wagons, which are used as the vehicles

travelling on the physical infrastructure and transporting the actual freight. Under South African

conditions, however, the initial fixed infrastructure capital costs are shared by the entire rail network and

are not carried by the specific line only, which increases economic attractiveness.

Rail transport in South Africa is dominated by Transnet Limited, a public company with the South African

government as its sole shareholder. Freight transportation is managed by Transnet Freight Rail, the

largest division of Transnet Ltd, with its core business focused on freight logistics solutions designed for

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customers in industry based business segments, mining, and heavy and light manufacturing. Indelivering this service, rail transport is divided into General Freight and Heavy Haul lines, with Transnet

normally owning and providing the infrastructure, the rolling stock and the operating service.

While the current national rail network needs to be upgraded and strategically expanded, these

initiatives are severely hampered by inadequate electricity supply, theft and vandalism, as well as the

unavailability of rolling stock, which negatively impacts on operating capacity and ultimately on service

delivery. Transnet has recently indicated that the main focus over the next five years will be on

eradicating investment backlogs and focusing on operational improvements. The 30-year national

infrastructure plan will focus on capacity expansions, in line with economic and industrial policies.

With regards to coal transportation, the most important current corridor is the Coalink line between

Blackhill and Richards Bay, with a current capacity of 72 MTPA, which will be upgraded to 81 MTPA by2010. Transnet further plans to increase the capacity to 91 MTPA, which will be completed by

approximately 2020, after which it will remain constant until at least 2037.

With regards to linking the emerging Waterberg coal field with Mpumalanga and the CoalLink line,

Transnet agrees that the current Waterberg infrastructure does not have any surplus capacity and needs

to be upgraded, or a new line needs to be constructed. To this end the company is investigating various

alternatives, with an eventual completion date of 2020 to 2025 in mind.

When faced with a transport requirement over a long distance, crossing relatively flat terrain, with few

obstacles and where most of the crossed land is owned or accessible, rail transport is arguably superior

to most other transport options. However, in South Africa, where the rail network and rail transport in

general is managed by a public company without any direct competition, any expansions to the existingnetwork are extremely slow, while inadequate maintenance and unreliable service delivery have forced

a significant volume of bulk freight onto road transport.

8.2.2 Magnetic Levitation Systems

Magnetic Levitation, or Maglev, is a system of transportation that suspends, guides and propels vehicles,

predominantly trains, using magnetic levitation from a large number of magnets for lift and propulsion. This

method of transportation has the potential to be faster, quieter and smoother than wheeled mass transit

systems, such as conventional rail transport systems. The power needed for levitation is usually not a

particularly large percentage of the overall consumption; most of the power used is needed to overcome air

drag, as with most other high speed trains.

The highest recorded speed of a Maglev train is 581 km/h, achieved in Japan in 2003. Although this is

extremely fast for a land based transport system, it is slower than many aircraft, since aircraft can fly at far

higher altitudes where air drag is much lower. However, the technology has the theoretical potential to

exceed 6,400 km/h if deployed in an evacuated tunnel.

The first commercial Maglev passenger train wasofficially launched in 1984 in Birmingham, England. It

operated on an elevated 600 m section of monorail track between Birmingham International Airport

and Birmingham International railway station, running at speeds of up to 42 km/h. The system was

terminated in 1995 due to problems with reliability and design.

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Perhaps the most well known implementation of high-speed Maglev technology currently operatingcommercially is the IOS (initial operating segment) demonstration line of the German-built Transrapid

train in Shanghai, China, that transports people across a lead distance of 30 km (18.6 miles) to the

airport in just 7 minutes 20 seconds, achieving a top speed of 431 km/h, averaging 250 km/h.

These Maglev trains were thus primarily designed for high speed passenger transport systems

(Figure 10) between dedicated, highpassenger volume origins and destinations, such as airports, train

stations and city centres. The technology further offers the advantages of being much faster, quieter and

energy efficient than conventional trains, although this all comes at a much higher price.

Some companies have started with the experimentation of Maglev cargo transport systems(Figure 11)

which is combined with other new technologies, such as hydrogen fuel cells. In terms of this freight transport,

however, the system has the distinct disadvantage that it does not allow for backward compatibility with

existing rail infrastructure, as Maglev trains cannot operate on conventional rail systems. This means that

existing rail networks would be defunct and that an entire new network will have to be constructed, which

massively increases capital costs.

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The biggest disadvantage of Maglev systems for commercial freight applications is the extremely highprice tag. The United States Federal Railroad Administration Draft Environmental Impact Statement for

a proposed Baltimore-Washington Maglev project, indicated an estimated 2008 capital cost of R558

million/km, for this 62 km line. It further indicated a R224 million per annum operating cost, excluding

maintenance and breakdowns.

Based on the backward incompatibility issue, as well as the prohibitively expensive capital cost of a

Maglev system, this technology was not deemed feasible for coal transport and therefore was not

investigated any further.

8.3 PIPELINE AND TUBE BASED TRANSPORT OPTIONS

Pipeline and Tube Based transport systems enable the transportation of goods through a fixed pipesystem or network. Most commonly, liquids and gases are pumped through such pipelines. Pneumatic

tubes that transport solid capsules using compressed air have also been used, while recently proposed

systems now use capsules that are electrically powered.

The following sections expand briefly on each pipeline and tube based transport option, while each

mode of transport is covered in significant detail in the appendices.

8.3.1 Coal Log Pipelines

The experimental Coal Log Pipeline (CLP) system is

based on the concept that coal can be compacted

into large cylindrical shapes, called Coal Logs(Figure 12)for pipeline transportation using water or

another liquid as the carrier fluid. When transported

via pipeline in water at 2.5 to 3 m/s, sufficient

hydrodynamic lift is generated to move thecoal logs.

The logs become waterborne and they make only

light contact with thepipe. Consequently, thewear of

coal logs and the pipe are both minimal and the

power required for pumping is also minimal. CLPs

are described in more detail inAppendix G.

CLP transportation is often compared with Coal

Slurry Pipelines, although in coal slurry pipelines thecoal is transported in a paste format and not in a

log format. CLP therefore requires much less water,

the dewatering of the coal at the destination is much easier, it uses less energy to transport each tonne

of coal, and it makes the clean-up process much easier in the event of spills.

The biggest disadvantage of CLP transport is the fact that the success of the initiative is entirely

dependent on the type of coal being transported. Coal type and the compacting method determine the

characteristics and durability of the coal log during transportation. To accurately ascertain whether coal

mined from a specific area could be successfully transported via CLP, such coal needs to be tested in

trial applications first, which is relatively expensive.

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The other major limiting factor of the CLP system, especially under South African conditions, is the needfor large quantities of water to transport the coal efficiently. For every tonne of coal transported, the

system requires 250 to 333 litres of water. This rapidly grows into a substantial water requirement as the

coal throughput increases.

The maximum achievable throughput capacity of the CLP is currently a theoretical calculation and

depends on various factors, including pipeline distance, pipe diameter, pumping system and coal

characteristics, to name a few. However, pilot plant tests revealed that throughput rates of up to 17

MTPA are achievable for a pipeline system with a 508 mm diameter, across distances in excess of

3,000 km.

The capital investment cost for a CLP system is relatively high, and is mainly dependent on the pipe

diameter and the transport lead distance. It should be noted that the Inlet Subsystem cost has asignificant impact on the transport unit cost and decreases the attractiveness of the system over short

distances. It is therefore suggested that the CLP system should be considered only for transport distances

longer than 30 km. Water and energy charges dominate the operating and maintenance costs, but

these are relatively low when compared to other pipeline based transport systems.

The CLP concept is still experimental and has only been tested under pilot plant conditions, and no

commercial application of the technology has taken place since its demonstration in 2001. The main

stumbling block against using this newtechnology revolvesaround thecoal properties, as discussedearlier.

In conclusion, the CLP appears to be a very high risk option, but it promises significant savings potential

if the coal characteristics match the optimum operating conditions. However, this will require much

more research and investment before it can be accurately determined.

8.3.2 Slurry Pipelines

Slurry Pipelines are used to transport mineral concentrate from a mineral processing plant near a mine, to

ports or other intermediate or final destinations. These pipelines use a slurry of water and pulverized coal,

mixed to a ratio of approximately one tonne of coal to one tonne of water. The coal slurry is then pumped

through a dedicated pipeline to a processing facility where dewatering takes place. At the dewatering

plant, the material is separated from the slurry and dried before it can be used. The resulting water is

usually subject to a waste treatment process before disposal, or it is returned to the origin station, at an

additional cost, where it can be reused. Slurry Pipelines are described in more detail inAppendix H.

Slurry Pipelines provide an unobtrusive, environmentally friendly, safe and secure transport mode with acontinuous flow and a very low maintenance requirement. The single biggest limiting factor of the Slurry

Pipeline system, especially under South African conditions, is the necessity for large quantities of water

to transport the coal efficiently. For every tonne of coal transported the system requires approximately

1,000 litres water, which is three times more than the water requirement for CLPs. The requirements

rapidly grow into a substantial water volume as the throughput increases.

The maximum achievable capacity of a Slurry Pipeline system depends on various factors, including

pipeline distance, pipediameter, pumping system, material density, dewatering requirements and water

availability, to name a few. Theoretically, therefore, the throughput can be increased incrementally by

increasing the pipe diameter and the pumping capacity. However, most Coal Slurry Pipelines in

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operation today transport less than 5 MTPA, which seems to be a practical limit. As an example, theworld's largest coal slurry pipeline is the Black Mesa pipeline in the United States. Built in 1970, this

18-inch pipeline transports 4.8 MTPA from Black Mesa, Arizona, to a power station in southern

Nevada, over a distance of 436 km.

The up-front capital cost of a Slurry Pipeline system is dominated by the construction of the preparation

plant and terminal station, which remains constant, regardless of the pipeline length. For this reason,

Slurry Pipelines are more suited to longer distance transport. Water and energy charges dominate the

operational expenses of Slurry Pipelines but, although the energy cost increases incrementally with

distance, the water cost remains constant if the throughput remains unchanged. Consequently, as was

the case with the capital costs, Slurry Pipelines are more economical at longer distances.

Based on these factors it can be concluded that slurry pipelines become very expensive at low volumes,and that the optimum applicationof the technology is found around the designed maximum throughput

rate of approximately 5 MTPA at distances beyond 500 km.

Regardless of the benefits of Slurry Pipelines, the biggest risk to the feasibility of this technology is the

extensive water requirement and the strain that it would place on the local water supply, especially in most

inland locations within South Africa. A promising new South African coal field is in the Waterberg area of

Limpopo province. TheDepartmentof Water Affairs andForestry (DWAF) has indicated that it is unlikely that

any water allocations would be made available in the Waterberg area for pumping coal, given the current

low water supply. Therefore Slurry Pipelines would not be an option in this water scarce region, unless

additional supply sources are introduced, which would further increase the operating cost of the system.

8.3.3 Tube Freight Transportation Systems

Tube freight transportation is a class of unmanned transportation in

9. coaltech transport investigation report.pdf

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