South32, a Perth-based mining and metals company, and Transnet signed a seven-and-a-half-year contract for manganese transport services, which will provide security for exported manganese volumes to Transnet and security of export rail and port logistics to customers. The contract will be back-dated from 2015 until March 2023.
Under the USD 887 million (ZAR 10.4 billion) contract, Transnet will transport 2.6 million tonnes of export manganese per year.
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 year transported mainly from the Hotazel area in the Northern Cape through the Saldanha (harbour on the south-western coast) and Port Elizabeth ore railway lines.
For manganese sector development, Transnet and key producers set aside a 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,” Gert De Beer, Chief New Business Development Officer at Transnet said.
The contract signed with South32 is aligned with Transnet’s Manganese Expansion plans to create capacity ahead of demand in freight, ports, terminals and rail systems in South Africa. The 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.
Currently, 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.