At a signing ceremony held on 22 March 2018, Transnet and South32, a global resource company, signed a seven and a half year Manganese Export Capacity Allocation contract.
This contract will allow for the transportation of 2.6 million tonnes of export manganese per annum and realise close to ZAR10.4 billion in total value for Transnet.
Furthermore, it will provide security for exported manganese volumes to Transnet and security of export rail and port logistics to customers.
“We are pleased with reaching this key milestone with South32. The signing of such a contract speaks to Transnet’s commitment to supporting the mining industry in South Africa. This contract will be followed by other important players in the manganese sector and will result in a secure and robust manganese export volumes for our European and Chinese markets,” said Gert De Beer, Transnet Chief New Business Development Officer.
Transnet together with key manganese producers have set aside 15% percent of the overall manganese export line capacity for the new entrants in the manganese export market.
“The 15% capacity allocation was made available to encourage new and emerging entrants to take part in mining activities in the country,” adds De Beer.
Transnet plans to sign similar contracts with nine local manganese producers, including South32, which will see a total of 12.5 million tonnes of manganese per annum transported mainly from the Hotazel area in the Northern Cape through the Saldanha and Port Elizabeth ore railway lines.
“We are pleased to have reached an agreement with Transnet which supports the base production plans of our manganese ore business. This contract provides a stable base for the execution of export sales, with no significant exposure to the business during market down cycle. Furthermore, it demonstrates the strength of the relationship between South32 and Transnet as it underpins the value of both businesses,” said Lucas Msimanga, South32 Manganese South Africa Operations Vice President.
The seven and a half-year contract will be back-dated from September 2015 until March 2023. The contract term is aligned with Transnet’s Manganese Expansion plans to create capacity ahead of demand in freight, ports, terminals and rail systems in the country.
Transnet’s manganese expansion programme will increase the commodity’s export capacity through the update of the rail network between the Hotazel area and Coega in the Eastern Cape and the provision of the new bulk terminal at the Port of Ngqura.
South Africa accounts for close to 75% of global manganese reserves. The project aims to retain the country’s position as the leading exporter of high-grade manganese ore.