Another agreement involving collaboration between the public sector and the private sector in the field of rail transport service has been signed, this time between the Johannesburg Stock Exchange-listed Exxaro Resources and State-owned company Transnet Freight Rail (TFR).

Acting through its operating division, TFR has entered into a formal service agreement under the existing long-term agreement between the parties.

In terms of this agreement, Transnet and Exxaro will collaborate to improve the performance of its logistics channels, including to contribute to Exxaro’s Leeuwpan coal mine turnaround plan.

The agreement outlines clear performance expectations and joint planning initiatives to enhance rail capacity and optimise long-term logistics. This aligns with Exxaro’s commitment to operational efficiency and long-term sustainability, Transnet’s mandate to ensure the security of logistics supply, and supports the national objectives of strengthening South Africa’s trade and logistics.

Exxaro CEO Ben Magara expressed the belief that this service arrangement strategically unlocks value for Exxaro and capacitates sufficient strategic levers for the group.

“The agreement is good for the national economy and, specifically, Transnet’s commitment to assist Exxaro in minimising job losses and sustain mine viability,” Magara stated in a release to Engineering News & Mining Weekly, in which he thanked Transnet for the constructive manner in which this agreement had been reached.

Transnet group CEO Advocate Michelle Phillips said: “We’re confident that this agreement will unlock significant value not only for Transnet and Exxaro, but for the broader industry and economy.

“It reflects a shared commitment to rebuilding trust and delivering on our respective mandates for the benefit of all stakeholders,” Phillips added.

This partnership reaffirms both entities’ commitment to restoring and enhancing rail performance, promoting economic growth, and driving competitiveness and long-term sustainability within the mining and transport sectors.

The agreement follows Transnet and Hotazel Manganese Mines signing a ten-year contract under the third phase of the Manganese Export Capacity Allocation framework as well as Transnet and United Manganese of Kalahari signing a ten-year contract for the transportation of manganese by rail from UMK’s mine in the Northern Cape also under the Manganese Export Capacity Allocation agreement.

Moreover, Minister Barbara Creecy recently announced that 11 of the 25 private train operating companies that applied to operate routes on Transnet’s rail network had met the requirements to do so and would now be entering into contract negotiations to enable them to gain access to the network and begin operating the routes – an announcement that represents a significant step in opening South Africa’s freight rail network, which has hitherto been monopolised by State-owned Transnet, to third-party operators.