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Transnet increasing rail and port capacity allocation for emerging miners

emerging miners
May 31, 2022

by nfdeklerk 0 comment

Transnet increasing rail and port capacity allocation for emerging miners

To reduce barriers to entry, improve the ease of doing business and support transformation of the mining sector, measures are to be implemented to increase rail and port capacity allocation for emerging miners, Transnet announced on Monday.

Improving access to loading facilities, and simplifying the contracting, credit management and capacity application processes are among the initiatives to be undertaken, the State-owned transport enterprise stated in a release to Mining Weekly, after meeting with emerging miners, the Department of Mineral Resources and Energy (DMRE) and finance institutions to present the initiative, which applies to customers in domestic and export coal, iron-ore, manganese, magnetite, chrome and ferrochrome.

A 70:30 split between major and emerging miners is expected from 2027, with the implementation differing corridor by corridor, and the capacity allocation to being phased in.

The minimum requirements for emerging miners to qualify for capacity allocation include:

a valid mining right issued by the DMRE, and validated mining activities;
access to port capacity prior to applying for rail capacity;
access to a siding to accommodate loading of a train; and
minimum credit and legal requirements that take into account the stage of the entity.
Transnet stated that the measures being implementing align with the growth in demand for export capacity for mining products to meet global demand, as well as recent emerging miner growth.

Mining Weekly can report that ten active junior miners last year contributed 3.5-million tons to Richards Bay Coal Terminal (RBCT), short of the four-million tons allocated to emerging miners as part of the DMRE-guided Quattro Scheme Allocation but an improvement on past years.

RBCT itself fell far short of its 91-million-ton capacity in 2021, with its lowest export total since 1996 of only 58.72-million tons. The terminal’s target for this year is 70-million tons.

The biggest challenge experienced as a value chain was receiving coal from the coal mines, with rail delivery being significantly disrupted by cable theft, a challenge coal exporters and Transnet are tackling jointly.

On the manganese front, mining company South32 is assessing the potential expansion and modernisation of rail loading infrastructure at its Wessels manganese mine in the Northern Cape.

Optimum export of metals and minerals is vital for the well-being of the South African economy, which has resulted in the private sector becoming a willing partner in working collaboratively with the public sector to remove obstacles in the way of export opportunities by taking steps to reform the security and upkeep of the vital rail network and avoid losing port business to countries such as Mozambique.