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Grindrod's locomotive lease unit to target African miners

Kamlesh Bhuckory

Rail capacity constraints and lack of investment in infrastructure have seen orders for locomotives already rolling in.

Rail capacity constraints are stifling efforts to export coal from Mozambique. (Nadine Hutton)

Grindrod Ltd., a South African company with interests in shipping and freight, said its new locomotive leasing unit will target mining companies operating in countries with weak infrastructure.

"We see an opportunity in Africa as there has been relatively little investment in infrastructure which will be required to sustain economic growth and service new mining projects," Grindrod Rail chief executive James Holley said in a phone interview on Monday from Johannesburg, citing countries including Sierra Leone, the Democratic Republic of Congo, Angola, Namibia and Zambia.

While South African ports and rail operator Transnet SOC Ltd. is rolling out a R307-billion rand investment plan to cater for miners including BHP Billiton Plc, companies including Rio Tinto Plc and Pretoria-based Exxaro Resources Ltd. say rail capacity constraints are stifling efforts to export coal from Mozambique.

Grindrod’s freight services unit has formed a joint venture with Pembani Remgro Infrastructure Fund to provide leasing of locomotives and wagons to the African rail industry, it said in an e-mailed statement.

GPR Leasing Africa Ltd., in which Grindrod will hold a 55% stake, has already secured orders for 31 locomotives. The clients are a combination of state-owned railway companies outside South Africa and mining companies in Mozambique and Zimbabwe, Holley said. – Bloomberg

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