Kumba Iron Ore is under pressure from SA’s national logistics provider to allow more BEE miners to access its ore export corridor (OEC).
Kumba, Anglo American’s SA iron ore unit, relies wholly on the Transnet-owned and operated Sishen/Kolomela-Saldanha OEC to export its ore.
As the expiration date for Kumba’s existing contract with Transnet draws nearer, pressure is piling on from new players, particularly BEE miners, who are hungry for a piece of the pie.
“There is pressure from new market entrants, including manganese producers, to gain access to the OEC, as well as requests from Transnet to allow BEE miners access to the OEC,” Kumba said in its annual report published on Friday.
The company warned that the pressure “could reduce our contractual capacity and increase rates after the expiry of our current contract in 2027”.
Transnet said it had received a number of interests for rail and port services on the ore line.
“However, we cannot confirm the number of customers who will be onboarded when capacity becomes available as the process is undertaken through an open market invitation,” it said.
“Transnet has an obligation to ensure inclusivity and must not exclude industry players. Therefore, when the capacity becomes unencumbered with the existing contracts, Transnet will have to consider all interests presented to it.”
At present Transnet services four iron ore exporters on the ore line, Kumba, Assmang, Afrimat Bulk Commodities and Sedibeng Iron Ore.
The miner’s ability to remain competitive in the global seaborne iron ore industry over the medium to long term largely depends on its success in extending the life-of-asset of its Sishen and Kolomela mines in the Northern Cape.
This means there is a heightened need for stable, reliable rail transport. However, Transnet’s ageing infrastructure and inadequate maintenance practices continue to affect the reliability and efficiency of the iron ore channel, said Kumba.
The group said it had played an “active role in seeking to address some of the underlying challenges with the OEC’s performance”, including its contribution to the development of the ore corridor restoration programme in 2024.
The programme presents a “clear course of action to address the critical gaps identified in an independent technical assessment,” it said. Added to this was Kumba’s involvement in the vOre Users Forum and national logistics crisis committee.
“Given the significant effect of Transnet’s performance on Kumba’s activities, the board maintained a strong focus on monitoring the progress of Kumba’s various interventions aimed at restoring the OEC to its nameplate capacity,” said Kumba chair Terence Goodlace.
With Kabelo Khumalo
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