Logistics remained one of the most critical challenges facing South Africa’s mining sector, with rail performance having bottomed out and ports under sustained pressure to deliver, said Mzila Mthenjane, CEO of the Minerals Council South Africa.
“Transnet’s rail performance is trending upwards from its low of 149 million tonnes of all freight in 2022. In 2024, Transnet lifted deliveries 10 million tonnes higher than 2022, reaching 160 million tonnes. We’re anticipating about 168 million tonnes in the current financial year to end-March,” he said.
Speaking on the first day of the Investing in African Mining Indaba currently under way in Cape Town, Mthenjane said the 77-million-tonne plunge in railed volumes over five years to the 149 million tonnes moved in 2022 was quite rightly categorised as a crisis.
“Coal deliveries to Richards Bay Coal Terminal (RBCT) fell to 48.7 million tonnes in 2022 from 77 million tonnes in 2017. They are now at 57.7 million tonnes in 2025 as the joint initiatives and interventions with Transnet, staged by coal mining companies through the privately owned RBCT, deliver results.”
Export iron ore rail deliveries fell to 51 million tonnes in 2022 from 58.5 million tonnes in 2017. Deliveries over the past two years have remained between 50 and 51 million tonnes.
He said that while the improvement in rail services was encouraging, Transnet was at present simply not meeting its own targets and was still a long way from achieving the 226 million tonnes it railed in 2017.
According to James Holley, CEO of Traxion, around R200 billion is required to fix approximately 12 000km of the current rail network to ensure efficient rail delivery.
“The bottom line is that infrastructure has to be refurbished if we want to see any form of logistics improvement in the movement of minerals. The capital required can either be in the form of a government bailout, or the private sector is going to have to step up.”
Mthenjane said timing was important, but it was doubtful the country would be able to deliver solutions to its logistics challenges in time to benefit from the current commodity boom.
“It is how we missed out on previous commodity booms. You simply cannot build infrastructure fast enough to catch up with the opportunity of a commodity boom,” he told Freight News.
“Work has to be continuous and ongoing. The point has been made that it has to be expedited. Funding remains a problem. Transnet has been given guarantees at the moment, and that is not going far enough. The private sector participation process that has been started has to move faster. Of the 11 potential PSPs, about four are expected to be in place by the end of this year.”
A panel examining privatisation in the rail sector, however, concurred that when it comes to the mining sector, such agreements must include ports as well. “If you don’t include the port terminal in the privatisation discussion, you are simply moving the stack from the mine to the port and not actually addressing the problem,” said Wimpie Pienaar, head of logistics at Kumba Iron Ore.
