Exxaro plans to move its manganese exports from road to rail, shifting more than 1.5 million tonnes of freight off the road network as it seeks to reduce logistics costs and improve export competitiveness.
The company wants all manganese from the Tshipi Borwa mine to be transported by rail rather than road, chief executive Ben Magara said during Exxaro's Capital Markets Day presentation on June 22. He added that the company was engaging with Transnet Freight Rail (TFR) on additional capacity.
About 46% of Tshipi Borwa's annual manganese volumes currently move by road, with the remainder transported by rail. The mine exports about 3.5 million tonnes of manganese a year through the ports of Gqeberha and Saldanha, meaning that more than 1.5 million tonnes currently move by road.
Exxaro said road transport costs were about 37% higher than rail costs, while logistics accounted for 43% of free-on-board (FOB) export costs.
The company acquired a controlling stake in manganese producer Tshipi é Ntle earlier this year as part of its diversification strategy. Tshipi exports about 3.5 million tonnes of manganese annually and has a resource base of about 163 million tonnes.
Exxaro identified logistics optimisation as one of the key opportunities to improve returns from the manganese business. Magara said rail transport offered a significant cost advantage over road haulage and reiterated the company's intention to increase the share of manganese moved by rail.
Magara also said improved rail performance could unlock additional export opportunities across Exxaro's portfolio, noting that the company could double its coal export volumes if sufficient rail capacity became available.
