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Disruption on South African rail line pushes coal prices higher

https://www.chemnet.com   Mar 15,2016 Platts
Supplies of South African Richards Bay coal have been disrupted following a derailment on the main freight line Sunday, which was cited as a reason for higher FOB spot prices in Monday morning European trading.

State-owned logistics Transnet's freight division, Transnet Freight Rail, which operates the line confirmed that 46 wagons had been derailed near Ermelo -- around 420 km (260 miles) from the Richards Bay Coal Terminal port -- on Sunday.

The reasons behind the derailment were unclear, with a spokesman only able to confirm that the 200-wagon train had been empty, transiting back from the terminal to the mines when the incident had occurred.

The railway -- which is the main freight line running between ports in Richards Bay and Witbank, where the bulk of mines are located -- had been blocked since the incident but the first line is expected to reopen this evening, while the second should be open by Thursday.

The spokesman added that there would be no asset loss, with the rail company planning to schedule additional deliveries once it was able.

The coal line has a hauling capacity of around 71 million mt/year.

With stocks at Richards Bay Coal Terminal reported to be tight, the physical spot market appeared to have moved higher on the news, with an April-loading 75,000 mt shipment concluded at $58.20/mt, followed by a second for the same volume -- which could have been part of a sleeve deal -- at $58.50/mt around 0900-1000 GMT through the globalCOAL electronic platform.

This was $2 higher than closing prices for the same month on Friday.
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