17 March 2015 Primary Energy Division Clarification meeting: Tutuka Coal Terminal Handling Operations.

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Presentation transcript:

17 March 2015 Primary Energy Division Clarification meeting: Tutuka Coal Terminal Handling Operations

LONG TERM COAL TRANSPORT STUDY TUTUKA COAL SUPPLY BY RAIL 1.RAIL SUPPLY PER BURNPLAN 2.TUTUKA COAL SUPPLY ROUTE MAP 3.COAL SUPPLY OPTIONS 4.PRESENT LATEST PROPOSALS 4.1 SHORT TERM 4.2 MEDIUM TERM 5.PROJECT ROLLOUTS

AGENDA 3 1.Overview of rail strategy 2.Coal supply map 3.Tutuka rail network 4.Overview of Tutuka coal terminal lay-out 5.Scope of work

The Coal Logistics Strategy resulted in a concerted effort to move bulk fuel transportation from road to rail Ensure that all coal logistics are done in a safe and socially responsible manner Minimise adverse environmental impact of coal transport Involve BEE participants, where possible Where possible, accelerate reduction in trucking Objectives Security of supply Cost optimisation Safety and social responsibility In order to respond to the objectives of the Coal Logistics Strategy, the Road to Rail Migration approach to move from road to rail transportation was initiated Put the appropriate and relevant logistics solutions into place to ensure that power stations are supplied with coal from the targeted sources Where possible, build in the ability to switch modes of transport/or sources of supply in the event of supply problems Ensure that the transport of coal is done in the most cost optimal manner i.e. conveyor or rail Limit road transport due to high cost, and unacceptable safety/ social impact and risk Minimise additional cost of road repairs

The Eskom Board approved the rail capacity increase to 32Mt by FY Road Rail Conveyer FY16 5 FY18 32 FY FY FY FY FY FY FY Majuba CTS Camden Tippler Tutuka Tippler Grootvlei Container Hendrina Tippler Duvha Planned rail capacity vs road and conveyer Million tonnes (Mt)  For distances between x and y km, rail and conveyer transportation is cheaper than road, with conveyer being the cheapest  Rail will be used to augment and reduce the road transportation as per the Road to rail Migration Strategy  With increased use of rail, there is a marked reduction in Free Carrier Agreement (FCA)/ coal transport trucks from 650 to approximately 150 in 2018 which results in an overall reduction in logistics costs Source: PED, Team analysis Details to be confirmed and added with input from Mzi

A number of initiatives initially identified have not realised resulting in a revision of the planned rail capacity from 32Mt to 23.6 Mt by ,0 13,0 3,0 5,0 FY18 2,0 32,0 13,0 5,0 6,6 2,0 2,4 3,0 FY16 31,0 13,0 5,0 6,6 2,0 2,4 2,0 FY15 30,5 13,0 5,0 6,6 2,0 2,4 1,5 FY14 8,5 6,6 FY17 2,4 29,0 13,0 5,0 6,6 2,0 2,4 FY13 18,0 5,0 2,0 FY12 12,6 0,5 2,5 1,1 2,5 Grootvlei Duvha Majuba Hendrina Tutuka Camden 19,5 10,0 3,5 2,5 FY15 15,5 9,0 2,8 3,5 7,4 FY14 11,5 8,2 2,0 1,3 1,2 FY13 10,2 0,4 1,8 FY12 8,6 0,2 3,5 FY16FY18 23,6 13,1 3,5 8,0 FY17 20,5 10,0 3,5 Insights Duvha - Initial assumption of the tied colliery (Middleburg mine (MMS)) running out of coal is no longer valid as the production of the mine has improved significantly. Duvha is now only supplied by a conveyer belt system, reducing the rail capacity by 3.0Mtpa Hendrina - Supplied by a tied colliery,Optimum, through a conveyer belt system. The same assumptions as above are also no longer valid. This has affected the planned rail capacity of 2.4Mtpa Camden – Opening of Usuthu colliery, situated 5 km from the power station, has reduced the Camden rail capacity requirement from 5 to 3.5Mtpa Due to capex constraints the following have been put on hold – Tutuka tippler (additional rail capacity of 7.5Mtpa) – Grootvlei tippler (additional rail capacity of 5Mtpa) Power station rail capacity plans, initial Million tonnes (Mt) Power station rail capacity plans, revised Million tonnes (Mt) Confirm Grootvlei numbers. Graphs show increase from 2 to 3.5

TUTUKA COAL SUPPLY ROUTE MAP Greenview WELGEDAG Sentrarand Rietvallei Kelty Delmas Blackhill Witbank Trichardt Wonderfontein Saaiw. Machadodorp Carolina Breyten Halfgewonnen Hamelfontein Baanbreker Bethal Ermelo Camden Lothair Palmford Standerton Balfour North Grootvlei Hendrina Majuba Camden Matla Kriel Arnot Dhuva Komati Kendal Prop. CTS Link Line Springs Kromklip Perdekop Vooruitsig Volksrust 23 Wykom Newcastle Ekandustria Forfar Bronkhorstspruit Rietkuil 55 BSP BELFAST Pullenshope KENDAL LEEUWPAN HAWERKLIP PHOLA GGV RIETSPRUIT PHOENIX BLINKPAN KOORNF. UITKYK Ogies = 20t/axle (loading site & route) = 26t/axle (loading site & route) 28

TUTUKA CONTAINER OPERATION Container Terminal

1Empty train (50 wagon) stationary on lines 3 and 4 (Container facility) – rake of 25 wagons per line. 2Loaded train (50 wagons ) arrives from Standerton NDS exchange yard and authorised onto line 2. 3Mainline locomotives uncouple, move and couple to empty rakes on lines 3 & 4, and transfer them to line 1. 4Mainline locomotives return to loaded train on line 2, haul it out onto balloon and place train in two rakes on lines 3 and 4 for off loading. 5Main locomotives run around via open line 2 to empty 50w train on line 1, couple and start preparation for departure. 1Empty train (50 wagon) stationary on lines 3 and 4 (Container facility) – rake of 25 wagons per line. 2Loaded train (50 wagons ) arrives from Standerton NDS exchange yard and authorised onto line 2. 3Mainline locomotives uncouple, move and couple to empty rakes on lines 3 & 4, and transfer them to line 1. 4Mainline locomotives return to loaded train on line 2, haul it out onto balloon and place train in two rakes on lines 3 and 4 for off loading. 5Main locomotives run around via open line 2 to empty 50w train on line 1, couple and start preparation for departure. OPERATIONAL WORKING (CONTAINERS)

1.Container slab 2.Carports 3.Culverts 4.Operations office building 5.Control Tower Bridge 6.Reach stacker building 1.Container slab 2.Carports 3.Culverts 4.Operations office building 5.Control Tower Bridge 6.Reach stacker building TUTUKA COAL TERMINAL

Typical Reach Stacker Operation (Off-loading full containers) Offload a 50 wagon train in less than 4 hours

Technical Evaluation Criteria Number of years of experience in coal terminal handling operations – 20% Demonstrated experience in designing and implementing supply chain solutions – 10% Relevant strategic and management experience in supply chain logistics (Years) – 8% Relevant experience in the operations of terminal equipment (Reach stackers and hysters) (Years) – 15% Roll out plan for the supply of coal terminal handling equipment - 12% Interpretation of the coal volumes translated to equipment required in the terminal – 10% 12

Technical Evaluation Criteria Ability of proposed solution to unload the train in under 4 hours – 10% Service level and equipment availability proposal – 5% 24 Hour staffing plan – 5% Relevant experience in rail operations - 5% 16 March

Thank You

Summary The Coal Logistics Strategy resulted in the Road to Rail Migration approach Some recommendations have been put forward to bridge the gap  The Logistics department in PED is exploring solutions with Transnet Freight Rail (TFR) that will increase the 2018 rail capacity to 29.1Mt  These solutions include ̶ Collaboration with TFR to capitalise and manage a tippler solution at Tutuka ̶ Provision by TFR of a container solution at Grootvlei  The overall reduced burn requirements of various stations and proximity of mines to power stations decrease the viability of rail use  As such, it is unlikely that the initial target of 32Mt will be attained by 2018 The changing environment has resulted in the targets set for the Road to Rail Migration not being met  There have been a number of changes in the factors that underpinned the initial road to rail migration approach  These factors include: ̶ Some of the rail projects identified originally are not financially viable anymore due to the weak economic benefit ̶ Capex constraints have resulted in a halt to the capacity upgrade projects  Due to these factors, and if there are no changes in the status quo, the rail capacity is expected to reduce from 32Mt to 23.6Mt by 2018  The Eskom Coal Logistics Strategy was initiated in 2008 with the following objectives ̶ Security of coal supply to stations ̶ Cost optimisation of coal transportation ̶ Safety and social responsibility of coal logistics  A direct result of the strategy was the concerted effort to move bulk fuel transportation from road to rail  In light of this, Eskom committed to transporting 32Mt per annum of coal via rail by 2018¹ and this was approved by the Eskom Board in April Commitment is to provide rail infrastructure capacity to allow movement of 32Mt per annum. Actual increase in coal tonnages being moved by rail will be obtained through operational efficiencies, resourcing, maintenance, and continuous improvement Source: PED, Team analysis 15

Options are being investigated to bridge the rail capacity gap rom 23.6 to 29.1 Mt in FY2018 3,5 0,2 3,5 10,0 3,5 19,5 2,5 10,0 FY16 15,5 3,5 9,0 2,8 FY15FY18 23,6 13,1 3,5 FY17 20,5 FY16 5,0 22,0 FY17 7,5 3,5 10,0 13,1 3,5 19,5 5,0 10,0 3,5 29,1 FY18FY15 2,5 15,5 9,0 2,8 3,5 0,2 Power station rail capacity plans Million tonnes (Mt) Source: PED, Team analysis Tutuka Grootvlei Majuba Camden TFR is providing a container solution to handle and receive 5Mtpa on rail at Grootvlei TFR is evaluating the option of investing in a tippler solution at Tutuka power station to increase the rail capacity to 7.5Mtpa These initiatives and collaboration with TFR will increase the total annual rail capacity from 23.6 to 29.1Mt 1 2 Expected change

COAL SUPPLY BY RAIL – TUTUKA POWER STATION SHORT TERM (2011 – 2013)MEDIUM ( )LONG TERM ( ) Coal in 20 ton containersCoal in bulk - TFR service to New Denmark Siding – Standerton Coal in bulk (58 ton) – New Baanbreker line 2 X 25 wagon off load spursShuttle shunt service – NDS to Tutuka yard Direct supply from Kelty (via Baanbreker) Reach stacker handling1 x Rotary tippler – 3,3 mtpa 2 x Rotary tippler – 6,6 mtpa Strategic link to Coal Export Line Road haul to stockyardDouble conveyor link to conveyor 11 (a) & (b) Coal in bulk (58 ton) – New Baanbreker line CAPEX OPEX R 30 m (Terminal) + R 70 m (Rail) R 99,00 / tonne R 40,00 (TFR) + R 17,50 (handling) + R15,00 (loading) + R12,50 (haul) + R 12,00 (containers) R 300 million (Tipplers & takeout) R 83,70 / tonne R 70,20 (TFR) + R 9,00 (Rail shuttle) + R 4,50 (Tippler) R 1,0 billion (New Link) R 34,50 / tonne R 30 (TFR) R 4,50 (Tippler) RAIL DELIVERY trains / day (50 w trains) 6 000t / day = 1,8 mtpa 3 to 6 trains / day (60 CCL wagons) t / day 3,3 mtpa (Ph 1) or 6,6 mtpa (Ph2) 6 trains / day (76 CCL wagons) tonnes / day Installed capacity 8,5 mtpa