Transnet to allocate 30% of rail capacity to emerging miners

News Analysis

2

Jun

2022

Transnet to allocate 30% of rail capacity to emerging miners

South Africa’s state-owned logistics enterprise will simplify the process for emerging mining companies to receive rail capacity allocation. A 30% capacity allocation to emerging miners for moving coal, iron ore, manganese, magnetite, chromite and ferrochrome is planned by 2027.

Transnet’s plan is designed to address a growing demand for rail capacity.  Increased demand for raw materials in the steel and energy sectors has fuelled rapid growth in South African raw material exports.  However, South Africa's rail infrastructure is causing bottlenecks.  The problem is particularly marked in the chromium and manganese supply chains, where Transnet has failed to develop new infrastructure to ensure that manganese can move from Hotazel to Gqeberha (previously Port Elizabeth) and chromite can be sent from the Bushveld to Richards Bay. To compensate, exporters have become increasingly creative - moving material via truck and alternative rail solutions to the full variety of ports in South Africa and neighbouring Mozambique and Namibia.

In order for emerging mining companies to qualify, the suppliers need to provide a valid mining licence from the South African Department of Mineral Resources and Energy (DMRE) with access to siding and port capacity for their material.


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