Minerals Council South Africa CEO Mzila Mthenjane says logistics reforms are “moving in the right direction”, with private sector participation and government-business collaboration starting to deliver progress, albeit at a slower pace than some would like.

Speaking at the Africa Down Under conference, in Perth, on Wednesday, Mthenjane pointed to the recently announced 11 private train operators approved to run 41 routes, including all of South Africa’s major mining corridors, as evidence that the logistics reform process was gaining traction.

The successful train operating companies that will gain access to Transnet’s rail network will provide an additional 20-million tons of capacity a year over the next five years, he told delegates. “We believe this is just the first window, and there that there should be subsequent windows, which will see production and volumes increasing up to 250-million tons a year.”

Transnet, South Africa’s State-owned freight logistics group, has a stated target of moving 250-million tons of freight by 2030.

Mthenjane noted that, with increased private-sector participation, targets should be reached.

Australia-headquartered Jupiter Mines MD Brad Rogers also underscored the importance of logistics in his address, pointing out that land logistics account for about 35% of the Tshipi manganese mine’s cost of production – compared with about 10% to 15% for mining itself.

“Rail logistics for bulk miners are constrained in South Africa. For Tshipi, that means although we produce 3.6-million tonnes of manganese ore, we are only able to put about half of that across the rail line,” Rogers said.

“The performance of the manganese rail line is actually fine. It is not a performance issue, it is that exports over the last 15 years have expanded and have outstripped the capacity of that rail system to support them.”

Rogers reported that engagement with Transnet had been “very positive” over the past 18 months to two years, with both individual and collective initiatives under way to expand capacity.

“We are encouraged that over time those constraints will be dealt with, so South Africa’s globally leading manganese franchise can realise its full potential,” he added.

In the meantime, Tshipi has turned to alternative routes, including road haulage and exports through Namibia’s Port of Lüderitz and South Africa’s Port of East London. “Our focus is on continuous improvement and lowering operating risks and costs. Rail remains the biggest priority, but we are also innovating around other paths to market,” Rogers said.