The Minerals Council is collaborating with state-owned rail and ports company Transnet in a bid to improve the performance of the rail network whose failures have led to R85bn in lost revenue for the mining industry over the last two years.
The dysfunctional freight rail system has prevented the industry from getting its products to the ports for export.
The Minerals Council and Transnet have agreed to establish joint collaborative structures with the aim of ensuring “that all possible actions are taken to stabilise and improve the throughput of SA’s rail and ports systems”, they said in a joint statement on Monday.
Minerals Council president Nolitha Fakude said the two entities “are determined to find practical solutions to our rail and port challenges and ensure that all producers big and small share in the inclusive growth that comes from improved operational performance.”
Asked whether the move was not an admission of failure on the part of Transnet of its ability to address its dysfunctional freight rail system, Minerals Council spokesperson Tebello Chabana said it was not a time to attribute blame but to find solutions.
Chabana said the mining industry had lost R35bn in revenue as a result of Transnet non-performance in 2021 and R50bn in 2022.
Transnet has been hampered by poor maintenance, a lack of spare parts for trains, copper cable theft and vandalism. The company was also hard hit by the floods in KwaZulu-Natal which destroyed crucial infrastructure while a strike by Transnet workers in October limited the ability of the parastatal to transport goods.
The statement noted the integrated nature of the mining industry as part of the logistics system and said “the Transnet board and Minerals Council office bearers have agreed to work together with a mutually agreed focus on helping to stabilise the whole system’s performance which entails responsibilities on both sides. Both parties agree that stabilisation and then recovery are in the interest of all parties in the value chain.”
To achieve the stabilisation and improved performance, the two entities have agreed to establish an oversight panel, a recovery steering committee and channel optimisation teams for each of the major commodities, namely coal, iron ore, manganese and chrome.
The oversight panel, made up of the principals and office bearers of the Minerals Council and the Transnet board jointly chaired by the Minerals Council president and the chair of the Transnet board will guide the work of the recovery steering committee — and work towards rebuilding good relations between their respective teams which are the member organisations of the Minerals Council and the Transnet executives and management.
The five-a-side recovery steering committee, made up of Transnet board members, the Minerals Council CEO and CEO representatives of the bulk commodities will deliberate and agree on practical solutions to improve flows across the system.
The recovery steering committee will drive solutions that are cross-cutting to the rail and ports, to the commodity channels, and also consider areas where there is a referral for resolution from the channel optimisation teams which already exist.
“We look forward to an equally open and constructive relationship with the Minerals Council and key Transnet customers to stabilise the performance on the channels for the benefit of the country,” said Transnet chairperson Popo Molefe.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.