Maritime and Transport | Rail

Spotlight on Mozambique: Value of rail investment for end-to-end mining logistics solutions

5 Feb 2014, by Informa Australia

Mozambique's Minas Moatize
Mozambique’s Minas Moatize coal operations

Transport solutions play a key role in differentiating coal companies.

An efficient and productive supply chain is a value-add investment and from negotiating rail access agreements and allocation, to rollingstock improvements and upgrades in train control system, mining companies are investing in this competitive advantage that logistics affords.

Rowan Karstel, Beacon Hill’s CEO
Rowan Karstel, Beacon Hill’s CEO

Mozambique’s Moatize Coal Basin is one of the largest developing coking coal regions in the world and coal producer, Beacon Hill Resources has made a number significant investments in its end-to-end logistics solution for this region with new rollingstock being the most recent.

Beacon Hill’s CEO, Rowan Karstel commented: “The completion of our purpose built locomotives and wagons [is] a key facet of our end-to-end logistics solution, as we move up through the gears targeting Tier One cash cost coking coal production from our Minas Moatize Mine in Tete, Mozambique.  Our secured allocation on the Sena Line to Beira, which equates to 500,000 tonnes per annum or 7.7% of the total capacity is a key differential for Beacon Hill, and the delivery of our rolling stock will enable us to capitalise on this important distinction.”

The five new Grindrod RL30SCC-3 diesel locomotives and 90 new Gondola-type rail wagons by South Africa’s Transnet Engineering, will be used to transport the company’s and other producers coal over a distance of 580km from the Minas Moatize mine area to the Port of Beira in Mozambique (‘Beira’)

This new rollingstock solution is in addition to the commissioning of a $6-million loading facility with joint venture partner Jindal Steel and Power (JPSL). Beacon Hill recently reported that the 300% increase in the capacity of its Minas Moatize coal wash plant to 1.8-million tons a year had been completed, with the fist low-volatile premium hard coking coal and export quality thermal coal having been produced.

Despite the spot price of coking coal being lower than that of previous years, Beacon Hill’s CEO, Rowan Karstel believes that the company’s cost-effective logistics solutions puts in a good position to build value.  As a professional engineer with over 20 years’ experience in coal mining, Karstel prioritises logistics.

“This differentiates us from many of our peers and with the associated rail infrastructure developing well, we look forward to completing the commissioning of the wash plant and moving into full production over the coming months,” Karstel said.

Karstel appointed as CEO of Beacon Hill Resources in November 2012 and spent the first six months of 2013 on various key milestones that would ensure that its flagship Minas Moatize project became a tier-one asset. Prior to joining Beacon Hill, he P14M09 - HHR Africa 470x62worked at the Johannesburg listed thermal coal producer, Keaton Energy Limited and before this, was the Chief Project Development Officer at Optimum Coal Holdings where he was responsible for the development and execution of Optimum Coal’s project pipeline prior to the Company’s acquisition by Glencore International Plc. Karstel has also worked in South Africa and abroad in various capacities for BHP Billiton, Xstrata Coal and Mmakau Coal.

With Beacon Hill confident of securing addition funding to finance the expansion of its Mozambique project in Q2, it’ll be interested to see what its CEO has in store for 2014. To hear more, Rowan Karstel will discuss the value created by Beacon Hill’s rail access agreement at Heavy Haul Rail Africa in Johannesburg on the 20th March 2014.

Related stories:

First test train loaded at Beacon Hill’s Tete coal loading facility (Mining Weekly)

Beacon Hill confirms completion of rolling stock for Moz coal project (Mining Weekly)

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