Slow progress on Transnet manganese corridor frustrates miners

Manganese producers are frustrated by the apparent lack of progress they are seeing on the upgrade of the manganese corridor from the Northern Cape to the port of Ngqura in the Eastern Cape. In May, Transnet Freight Rail (TFR) got the go-ahead for the first phase of the larger R27-billion railways and harbour development project to start. The project would lift South African manganese export capacity above 20 million tpy, from the current 5 million tpy. “Since Transnet has started talk on the upgrade of the rail corridor, we are yet to see any action,” a CEO at one of the mines complained recently. He quoted Elvis Presley: “We want a little less conversation, and a little more action, please.” TFR previously indicated that it intended to start construction of the manganese rail line sometime next year or even in 2015, and to have it completed by 2017/18. Meanwhile TFR was to allocate at the end of September the existing rail capacity between the existing players, which include names like Assmang, Glencore and BHP Billiton, and the newcomers, which include Kudumane, Tshipi é Ntle and United Manganese Kalahari. Soon Kalagadi Manganese will join producers when its mine is finally commissioned. However, the rail capacity has not increased which has been causing anxiety for a number of producers. “Some will lose [with the rail allocations], some will gain, but the sum total will be that there will be no new tonnage going out,” David Ellwood, CEO of Metmar, a shareholder in Kalagadi Manganese, said. The new producers continue to complain that they are losing money because they have to transport much of their ore by road because of the lack of rail capacity, while they are also unable to grow because of volume constraints on the rail line. A further concern for manganese producers is that they are required to vacate the port of Port Elizabeth by 2016, on the understanding that they will relocate to Coega to ship from Ngqura. However, the rail line to Coega from Northern Cape will only be completed one to two years after the vacation deadline. Officially Transnet National Ports Authority has not issued any acknowledgement to the manganese market that it is aware of the disconnect between the two deadlines, and this is unnerving manganese producers. INSERT Since Transnet has started talk on the upgrade of the rail corridor, we are yet to see any action. CAPTION Manganese miners want action on railways and harbour development.