PAGE

Content

Waterberg Expansion Strategies

Rail Technologies

Questions

Overview of the Coal System

Introduction

Private Sector Involvement

PAGE

Waterberg Development supports the New Growth Path

2

Contribute directly to the objectives of NGP: • Creation of a favourable and globally

competitive coal mining sector

• Facilitating broad-based participation in

the coal mining sector, and

• Contribution to local and national job

creation targets

Catalytic SIP Programmes

• Waterberg Integrated Development

• Durban-Gauteng Development Region • South Eastern Node & Corridor • Saldanha-Northern Cape Corridor

PAGE

TFR’s role in the Waterberg

3

•  Waterberg development is at a critical juncture

▪  Reserves confirmed as strategic:

–  Dwindling reserves and qualities in Mpumalanga

–  Strategic source to Eskom to ensure security of supply

•  TFR plays a pivotal role to unlock logistics infrastructure and support

emerging miners

•  Waterberg development dependent on competitive logistics costs to

Eskom power stations and exports to Richards Bay and Maputo

•  Opportunity to:

–  Introduce new rail standards and technologies to provide a capital and

operationally efficient system

–  Provide a new connection to Botswana

PAGE

Content

Waterberg Expansion Strategies

Rail Technologies

Questions

Overview of the Coal System

Introduction

Private Sector Involvement

PAGE

South African Coal Resources

5

Waterberg reserves • Largest remaining coal in SA (> 70%) • Potential to integrate logistics solutions with Botswana reserves

Mpumalanga reserves • Historic coal supply basin • Resources and coal qualities depleting • Strategic shift from Mpumalanga imminent

PAGE

Botswana Coal Resources

Source: Bon Terra

×

×

×

×

×

×

×

×

×

×

×

×

×

× ×

× × ×

Folio 1c Folio 1b Folio 1e Folio 1a Folio 1h

Folio 1g Folio 1d Folio 1f

Folio 1l

Folio 1v

Folio 1h

Folio 1b Folio3r

Folio1f

Folio3t Folio 1j

Folio 1i Folio 1c

Folio3y Folio 1f

Folio3s

Folio 1f

Folio3u Folio3v

Folio1c

Folio 1s

Folio3p

Folio1b

Folio 1p

Folio1d

Folio3w

Folio 1c Folio 1g

Folio 1g Folio 1d Folio 1t

Folio 1o Folio 1n Folio 1h

Folio 1c

Folio 1b

Folio1a

Folio3q

Folio 1e Folio 1r

Folio 1e

Folio 1d

Folio 1u

Folio3a2

Folio 1ab

Folio 1l

Folio 1g

Folio 1c

Folio 1i Folio 1i

Folio 1f

Folio 1x Folio 1q

Folio 1m

Folio 1k

Folio 1aa

Folio3z

Folio 1j

Folio 1w

Folio 1k Folio3a1

Folio 1a

Folio 23a Folio 1y Folio 1z

Folio 1a

Folio 1a

PL158/2007 Folio 34b

Folio 1e

PL077/2006 PL076/2006

Folio 1ac

Folio3a4

PL056/2005 Folio 34e

Folio 34c

Folio 29e

Folio 34d Folio 34a

PL026/2007

Folio1e

PL035/2005 PL037/2005

PL025/2007

PL105/2007 PL055/2007

Folio 23c

PL054/2007 PL048/2007

PL035/2007

PL097/2007

PL036/2005 PL053/2005 PL061/2005

PL040/2007 PL060/2005

PL057/2005

PL10

3/200

7 PL038/2007

PL107/2007

PL080/2006

PL110/2005

PL050/2007

PL075/2006

PL106/2007 PL104/2007

PL099/2007

PL036/2007 PL041/2007

PL051/2007

PL074/2006

PL107/2005

PL102/2007

PL079/2006

Folio3x

PL073/2006

PL098/2007

PL106/2005

PL109/2005

PL096/2007 PL049/2007

PL070/2007

PL112/2005

PL081/2006

PL108/2007

PL044/2007

PL108/2005

PL114/2005

PL042/2007 Folio 1j

PL113/2005

PL053/2007

PL111/2005

PL037/2007

Folio1g

PL037/2000 PL046/2007 PL002/2004 PL001/2004

PL039/2007

PL069/2007 PL052/2007

PL232/2007 PL043/2007

PL047/2007 Folio3a3

PL151/2007

PL100/2007

PL231/2007 PL045/2007

PL003/2004 PL230/2007

PL055/2005

PL101/2007

PL054/2005

PL233/2007

PL162/2007 PL156/2007

PL093/2007

Folio 1d

PL152/2007

PL023/2007

PL031/2005

PL153/2007

PL157/2007

Folio 29a Folio 1b

PL027/2007 PL035/2000

PL222/2007

PL150/2007

PL155/2007

PL011/2004

PL022/2007

PL148/2007

PL154/2007

PL032/2007 PL171/2007

PL021/2007 PL078/2006

PL03

1/200

7

PL028/2007

Folio 23d

Gweta

Orapa

Kokong Tshane

Mopipi

Kasane

Gumare

Ghanzi

Shakawe

Tsabong

Jwaneng

Semolale Bobonong

Nxaunxau

Sefhophe

Mmathethe

Maitengwe

Charles Hill

Gaborone

Serowe

Maun

Palapye

Mahalapye

Francistown

Lobatse

Selebi-Phikwe

0 50 100 150

Legend Coal Field Coal & Coalbed Licences

Botswana

Grootegeluk Mine

6

• Botswana’s resources are widespread

• Regarded as the 2nd largest remaining reserve globally

• Mineable quantity & quality to be confirmed

PAGE

Contextualising the Coal System in South Africa

Waterberg Feeder

Coal Backbone System

(North of Ermelo)

Coal Export Line (South of Ermelo)

Swazi Link System

Springbok Flats Coal Fields

Lephalale

Musina

Lothair

Maputo

Komatipoort

Ermelo

Ogies

Pyramid Broodsnyersplaas

Richards Bay

CFM

New Line > 30mtpa

Waterberg < 30mtpa

Limpopo Coal Fields

Waterberg Coal Fields

Mpumalanga Coal Fields

200 wagon 26t/axle 25 kV AC

100 wagon 20t/axle Diesel

100 wagon 20t/axle Diesel

Thabazimbi

100 wagon 20t/axle 25 kV AC

100 wagon 20t/axle 3 kV DC

Future Link

200 wagon 26t/axle 25 kV AC Turf

Tunnel

Horse shoe

Coalfields

Constraints

50 wagon 20t/axle 3 kV DC

Limpopo Coal and Minerals Feeders

PAGE

Transnet Freight Rail Coal System: Planned Capacity and Future Demand

Waterberg Feeder

Coal Backbone System (North of Ermelo)

Coal Export Line (South of Ermelo)

Swazi Link System

Lephalale

Musina

Lothair Maputo

Komatipoort

Ermelo

Ogies

Pyramid

Richards Bay

CFM

New Line > 30mtpa

Limpopo Coal Fields Waterberg

Coal Fields

Mpumalanga Coal Fields

Future Link

200 wagon 26t/axle 25 kV AC

Tunnel

Coalfields

97

23

Network Constraints General Freight New Heavy Haul line: In Feasibility

* 120

80

7 Year Committed

Future Demand

130 250

Limpopo Coal and Minerals Feeders

70

PAGE

South African Coal Rail System Development Investment Requirements

•  The SA coal system is an integrated network

•  Network capacity is shared with various commodities

•  Increase of capacity across all sub-systems to support demand

Projects Completion ETC (un-escalated)

Coal 81Mtpa In progress R 31,6 bn*

Coal backbone 2018 ~R5.1 bn

Coal 91Mtpa + 2018

Swaziland link 2018 #R 5,0 bn

Overvaal tunnel 2016 ~R 2bn

Waterberg feeder Phase 1

2012 to 2018 R 5,1 bn

Waterberg HH line: Phase 2 2020 +R32 bn

(#) Complimentary investment required by Swaziland Rail (*) Infra and Rolling stock – sustaining and expansion, escalated.

PAGE

Content

Waterberg Expansion Strategies

Rail Technologies

Questions

Overview of the Coal System

Introduction

Private Sector Involvement

PAGE

Waterberg Expansion Strategy: Two Phases

Lephalale

Ogies

Pyramid Broodsnyersplaas

Richards Bay

Thabazimbi

Phase 1: Interim phase will deliver an expected 23Mtpa of additional coal capacity by 2018/19 through an upgrade of the existing rail line and power supply systems

Lothair

Ermelo

Existing Line

New Line

Phase 2: Develop a new ~ 450km heavy haul line at 26 tons/axle that will extend the coal line from Ermelo to Thabazimbi

Botswana Link: Provide heavy haul connection from Waterberg into Botswana

PAGE

Waterberg : Phase 1 Upgrade of Existing Lines

Lephalale

Ogies

Pyramid Broodsnyersplaas

Thabazimbi

Lothair

Ermelo

Existing Line

New Line

Six stages for additional ~23Mtpa.

• Single line capacity to be increased incrementally by adding more loops, extending existing loops

• Provision of arrivals/ departure yard at Lephalale • OHTE change-over at Pyramid for dual voltage locomotives

• Electrification of the Thabazimbi – Lephalale section (25kV AC)

• Upgrading of the power supply en- route

• Conversion to 26 tons/axle

• Construction to commence in 2012 up until 2017

PAGE

Why a new heavy haul line for Phase 2?

• Volumes: Primarily Eskom driven

• Current single line via Rustenburg cannot

meet capacity and operational requirements

• Maintenance intensive turf area

• Freight and commuter traffic not compatible

• It is more cost efficient – capital and operational

- to build at HH standards

• Suite of mature HH technologies available

• Upfront energy efficient design for long term

scalability

• SA Inc competitiveness: Create a dedicated

freight corridor to the new coal basin

• Regional integration: Onward connectivity to

Botswana 13

PAGE

Waterberg New Heavy Haul Line: Phase 2 Potential New HH Route (Option 1)

Ermelo

Thabazimbi

Hammanskraal Atlanta

Environmental, social, geology and topography limitations makes finding new alignments challenging but not impossible

•  Ruling grade compatible with coal line standards in the loaded direction

•  Route length ~ 450km •  Thabazimbi to Ermelo – new, 26 tal single line

with 30 long passing loops, 14.7km of single line tunnels and 14.3km of single line viaducts

•  Provision of switching stations, SVC’s & feeder transmission line from Eskom for 25kV AC

•  200 wagon trains with head end or DP traction

Hammanskraal to Ermelo Longitudinal section

PAGE

Connecting the heavy haul line to Botswana

Cross border to Botswana

• Three river crossings options

o  Two crossings near Stockpoort linking to Mahalapye

o  One further south to link to Mmamabula

• ~110km new line • Coal line design standards

3280m wide, 4.1m deep

2844m wide, 3.8m deep

2

1

3

1

3969m wide, 4.8m deep 2

3

PAGE

Route   Distance km  

ETC (Rbn)  

Trans Kalahari  

1 500   96  

Nacala   2 200   125  

Waterberg   970   32  

Ore Line Ext   1 600   76  

Techobanine   1 100   99  

Regional Integration

NAMIBIA

BOTSWANA

MOZAMBIQUE ZIMBABWE

SOUTH AFRICA

Nacala

Richards Bay

Walvis Bay

Saldanha

Transwana/ Techobanine

Maputo

The Waterberg heavy haul line remains the most viable option for Botswana’s coal

reserves to various eastern seaboard ports

PAGE

Content

Waterberg Expansion Strategies

Rail Technologies

Questions

Overview of the Coal System

Introduction

Private Sector Involvement

PAGE

Rail Technologies to be considered in design of new Heavy Haul line

18

Regeneration of power Best opportunities for regeneration is in a downgrade and AC environment

Distributed Power

ECP (Electronically Controlled Pneumatic) braking

Dual-voltage locomotives

Train Authorisation (Train Control)

A suite of rail technologies are available that will improve capacity, operational efficiency, energy efficiency, train handling in challenging terrain, safety, sustainability, etc.

Technologies will be

included in the line specifications

PAGE

Content

Waterberg Expansion Strategies

Rail Technologies

Questions

Overview of the Coal System

Introduction

Private Sector Involvement

PAGE

Private Sector Involvement

• Waterberg heavy haul line is a Regional and National Imperative

• Strong sponsor support at PICC level

• Traditional funding models not adequate

▪ Strong greenfield investment focus

▪ Long term and stable investors required (20 years+) i.e. Institutional

Investors or Multi-lateral SPVs

▪ Debt financing and/or co-financing linked to Annuity Agreements

• Various models for funding of infrastructure and rolling stock to be

considered

• Multi-lateral agreements between sovereign countries critical

• Integration of planning and timing of regional port expansions

critical

20

PAGE

Content

Waterberg Expansion Strategies

Rail Technologies

Questions

Overview of the Coal System

Introduction

Private Sector Involvement

PAGE

Phases 1-6

5 0.9 0.8 1.2 0.3

2.9 4.6 6.7 7.3 12.2

23.4 33.5

7.8 10.8

15.7

15.7

12.3

0

10

20

30

40

50

60

70

80

Year of Phase Availability

Trai

ns p

er D

ay

GFB Coal - Export Thermal Coal Current Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6

New Single Line

79Mtpa

57Mtpa

33Mtpa 32Mtpa

17Mtpa 12Mtpa 9Mtpa 3Mtpa

Indicative Waterberg Capacity Ramp-up

Phases 1-6 Capacity : ~23

Mtpa

22

2012 2017 2018 2019 2020 2025 2026 2038 2043 Source: Waterberg FEL 1 Study

New Heavy Haul

Line

Capacity : ~80

Mtpa

23Mtpa

Heavy Haul Line