Although Captain Bruce of the Harlow believed the Waratah exploded, accounting for the two distinct flashes seen, no sounds of explosions were heard by the crew - wind blowing from Waratah to Harlow. Personally I believe that the two flashes were due to red socket signals (without explosive devices) or that there was a contained explosion within the engine room (sounds muffled) causing flashes of flames to be emitted from the funnel.
This paragraph is loaded. The Lunds put all their eggs in the Waratah adrift theory and clearly did not wish to entertain the possibility that Waratah had 'exploded' off Cape Hermes. If they had it would have opened a can of worms leading down a perilous route to probable culpability - Waratah had experienced a bunker fire on her maiden voyage and repairs to insulation defects were limited to the bunker in question.
This report, and others, is very clear in that the Lunds suggested the bush fire theory, adopted by the chief officer, who was no doubt looking for a way out, not having gone back to the scene of the 'explosion' to investigate or attempt to save lives. Clearly this failure, contrary to the Customs of the Sea, to return to the scene of the disaster would not have gone down at all well at Durban. It helped that no steamers by this stage were reported overdue at Durban. Mum was the word - until Captain Bruce's conscience got the better of him!!
If one wishes to pursue the image of a moving bush fire with distinct masthead lights and a red side light, 0.5 miles offshore, there is the possibility that a drum of burning oil on Waratah's foredeck, signalling distress, might fit the bill. The image below associated with the deck of a steamer is highly convincing!