Rail truck shortage hits ferrochrome exporters in the pocket

84 000 tons forced to move by road this year Leonard Neill SPOORNET'S SHORTAGE of rolling stock is creating major financial problems for the country's ferrochrome industry, with the largest producer, Xstrata, now being forced to shift vast quantities to the more expensive road transportation mode. "We are facing a crisis," says shipping manager Sam Krynauw, whose head office in Rustenburg handles the logistics for the company's operations in that area as well as in Brits and Lydenburg. All material is moved to Richards Bay for export. Annually decreasing price of ferrochrome on the international market is making the financial situation rather bleak "In the first three months of this year we had to transport 84 000 tons of an overall production of 309 176 tons by road because there were insufficient trucks available. We have a target figure this year of 1,2 million tons, and with no solution in the near future likely from Spoornet, we will have to transport around one-third of this, say about 336 000 tons, by road. "This is also a significant loss to Spoornet which charges R130 per ton. Road transport is R15 a ton higher. This comes at a time when ferrochrome prices internationally are falling, and with the rand now receding in value against the US dollar, it presents a pretty harsh picture." Spoornet quotes the vast theft of overhead cables and of braking equipment as well as derailments as its major trouble areas. Krynauw says there is also a problem with theft of the material, particularly when trucks are forced to stand for days at a time in railyards like those in Ermelo. In 1999 Xstrata exported 1 486 000 tons of which only 6 000 tons were moved by road to Richards Bay. This increased slightly in 2000 when production dipped to 1 153 000 tons and 10 000 tons were moved by road transport. "Things really began to change last year Ð 2001 Ð when we exported 842 000 tons of which we had to send 88 246 tons by road because there wasn't enough rolling stock available," says Krynauw. "Road transport is clearly much safer, because we have found on a regular basis that there is a difference, often as much as one percent, in the recorded weight at the port as opposed to that which we have loaded on rail at the plant. There is definite theft along the line. "When you sum it up in the overall picture, you must bear in mind that one-third of your costs are pre-FOB. Spoornet charges amount to about half of those, which, with the annually decreasing price of ferrochrome on the international market, is making the financial situation rather bleak for producers."