Transnet and Minerals Council join forces to eliminate bottlenecks

Transnet and the Minerals Council South Africa have announced a collaboration to improve rail and port handling that has cost producers billions in sales this year.

SA is believed to have lost over R50 billion in 2022 and R35 billion in 2021 because the state-owned railway, port and pipeline company failed to meet export targets.

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Monday’s announcement said the two groups “agreed to work together with a mutually agreed focus to help stabilize the performance of the entire system, which brings responsibilities on both sides.”

supervisory board

Both parties have agreed to establish an oversight board, reclamation steering committee and channel optimization teams for each of the key commodities: coal, iron ore, manganese and chromium.

A reclamation steering committee – composed of Transnet board members, the Minerals Council CEO and CEO representatives from bulk producers – will develop cross-rail and cross-port solutions.

The President of the Minerals Council, Nolitha Fakude, says: “We are committed to finding practical solutions to our rail and port challenges and to ensuring that all producers, large and small, participate in the inclusive growth that will result from a improved operational performance.”

PwC’s 2022 Mine Report, based on a survey of nearly 30 of the country’s largest miners, pointed to some of the logistical bottlenecks facing the sector, including reduced Transnet rail capacity and ports classified by the World Bank as ranked the worst in the world.

Durban, Cape Town and Ngqura (East London) have been ranked in the bottom 10 out of 370 ports worldwide according to the World Bank’s 2021 Container Port Performance Index.

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Earlier this year, the Minerals Council said R151 billion could be gained from additional exports, which would create an additional 40,000 jobs if all rail and port systems operated at intended capacity. The advantage for the Fiscus from additional sales of goods is not taken into account.

Minerals Council members account for more than 80% of Transnet’s rail business and 50% of its revenue, although this has not yet returned to pre-Covid levels.

The 11-day strike by Transnet workers in October this year has further impacted exports.

On average, South Africa exports around 476,000 tonnes of dry bulk goods a day, worth R1.06 billion. That number dropped to less than a third during the strike.

The Minerals Council said in a statement at the time that the major mineral export ports were operating between 12% and 30% of their daily average.

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“We look forward to an equally open and constructive relationship with the Minerals Council and key Transnet customers to stabilize performance on the channels for the benefit of the country,” Popo Molefe, Transnet chairman, said in a statement Monday.

This article originally appeared on Moneyweb and has been republished with permission.
Read the original article here.

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