TNPA’s proposed dues differentiation vexes bulk commodity producers

Bulk commodity miners are disgruntled that Transnet National Ports Authority (TNPA) is proposing a differentiation in cargo dues on beneficiated goods and raw materials. “As a country we don’t have the means from the availability of power to grow the beneficiation industry in the alloys business,” David Wellbeloved, director of projects at manganese miner Asia Minerals, said. TNPA has submitted to the National Ports Regulator a multi-year price determination proposal for rates, as well as its new pricing strategy, to be discussed with the regulator and stakeholders. The parastatal is proposing a 3% per year tariff hike for the three years from 2014/15. However, TNPA proposes to charge terminal operators and other port tenants nearly double what they pay at the moment, while the cargo dues would be substantially reduced. However, the tariff would be more preferential in the case of beneficiated products, while dues would increase on bulk and break-bulk commodities, including coal, iron ore, manganese and chrome ore. “Eskom’s tariff hikes make our smelted products more and more expensive,” Wellbeloved said. “The increased port charges, already uncompetitive, will just add to the fact that we can’t shift our product at a price that makes downstream business in South Africa viable. We will simply not be able to compete internationally.” An official at a ferrochrome producer said alloys producers were “damned if we smelted and damned if we don’t”. He explained that integrated ferro-alloys producers – those who smelt from their own captive ore – still had to export a portion of raw materials in order to have decent cash flow. “On the one end, the smelting business is being slammed with aboveinflation price hikes from all sides – electricity, labour, transport – killing our business because we can’t bring our product to market at a competitive price,” the producer source said. “On the other end we get slammed for trying to make a living from that which we still can supply competitively.”