LOGISTICS group Transnet Ltd plans to raise annual rail capacity for manganese ore exports to 7 million tons within five years from around 4 million tons this year, it said on Friday.

LOGISTICS group Transnet Ltd plans to raise annual rail capacity for manganese ore exports to 7 million tons within five years from around 4 million tons this year, it said on Friday.

Transnet CEO Chris Wells said more capacity would be given to manganese exports from Hotazel in Northern Cape to Port Elizabeth on the general freight rail, which is mainly dedicated to the metal used in alloys, including stainless steel.

Transnet also said the expansion of its coal export line would now only be completed much later than planned and that most of its projects could be delayed by rising costs.

Transnet is expanding the annual capacity on the iron ore railway lines to 60 million tons from 47 million tons and previously said it would raise the capacity of the coal lines to 81 million from 72 million by June next year.

"We are looking at putting in place a capacity of seven million tons (for manganese) in the medium term, both through PE and Durban, until we implement a new facility for manganese exports, I would say in the next five years," Wells said.

Transnet's freight arm, Transnet Freight Rail, has faced criticism for neglecting rail infrastructure, but the firm points to recent investments that are five times what was put into the sector every year previously.

Wells said the cost of a new oil pipeline planned to be constructed between Durban and Johannesburg, due in 2011, had also risen on the back of higher prices for steel and delays in getting some regulatory approvals for the construction.

Transnet has said its R80bn investment programme was on track and the company had managed to raise 90% of the funding needed for this year.

Wells said major expansion projects were on course but the time line for some schemes could change due to cost variations.

"With long-term contracts you don't know all the variables, but reasons would be the change of commodity prices and also getting regulatory approvals," Wells said of the pipeline project.

"All key projects that have been announced are continuing," he said.

Among major projects is an upgrade of rail transport to the Richards Bay coal export terminal.

"On coal, we have a big project in place to improve the efficiency of the process. The intention is to get that line to about 81 million tons capacity in five years."

Transnet said that its provisional revenue for the year to November 2009 had risen 5,5% to R23,6b and said it had R8bn in cash to finance projects. - Reuters