Richards Bay Coal Terminal’s (RBCT's) export volumes fell to their lowest in 25 years in 2021 as cable theft and operational problems at Transnet Freight Rail restricted its ability to ramp up exports.
State-owned TFR, which operates the railway lines, has been a victim of vandalism and theft, had to deal with a cyberattack last year that affected port operations, and has been constrained by inadequate locomotive availability.
RBCT chair Nosipho Damasane said this week cable theft has got out of hand and is the main cause of the fall in exports. She said 2021 was one of the toughest years on record due to such theft.
Speaking at the annual RBCT press conference, Damasane said: “The war is not over, it is actually getting worse in terms of cable theft.”
She said RBCT is working closely with TFR and the Minerals Council SA, which represents 80% of mining houses, to fully restore operations at the terminal.
RBCT, owned by a consortium of major coal exporters including Thungela Resources, Exxaro Resources and Seriti Resources, exports coal to markets such as India, China and Pakistan.
This week it announced a significant decline in 2021 export volumes to 58.72Mt, 11Mt down from the 70.20Mt achieved the previous year.
RBCT says the last time coal export volumes were this low was in 1996, when exports were 58.70Mt.
The fall in exports comes even though mining companies long ago warned of the impact of TFR’s logistical challenges on exports.
Minerals Council SA spokesperson Allan Seccombe said the decades-low level of thermal coal exports is of deep concern because it is symptomatic of the underlying problems of crime and infrastructural bottlenecks that are constraining the mining industry and the broader economy.
“We estimate companies mining iron ore, coal and chrome had an opportunity loss of more than R30bn in 2021 because of the inability to rail, and efficiently and timeously ship, bulk commodities overseas,” said Seccombe. “Consider the cost to the fiscus, let alone the reputational damage to South Africa as a mineral exporter, and it becomes immediately apparent how urgent it is for the state to effectively tackle crime and address logistical constraints.”
He says the council’s regular high-level engagements with Transnet executives and senior management have shown the devastating impact rampant crime on the rail infrastructure has had. “It has severely disrupted our member companies’ ability to reach their export targets, coal being one of the worst affected bulk commodities.
“Transnet’s difficulties in procuring spare parts for their rolling stock, particularly locomotives, has also proved deeply problematic in providing a sustainably reliable service,” said Seccombe.
Transnet’s difficulties in procuring spare parts for their rolling stock, particularly locomotives, has also proved deeply problematic in providing a sustainably reliable service
— Minerals Council SA spokesperson Allan Seccombe
RBCT CEO Alan Waller said the biggest challenge was to get coal from the collieries to the terminal.
He said in addition to being hamstrung by cable theft and locomotive availability, TFR closed the coal line for two maintenance shutdowns instead of the usual single shutdown — the shutdowns lasted 19 days.
Waller said RBCT has been working with TFR to understand what the challenges are and improve the overall efficiencies including beefing up security programmes as of October last year.
Waller reckons the significant increase in the resources deployed to keep the security situation under control has begun bearing fruit.
RBCT has increased aerial support for security surveillance. “Previously there were approximately eight drones deployed on the coal line — with ground support teams supporting that. If you look at the situation now we have up to 35 drones that are operating on the coal line, together with a significantly higher number of reaction units.
“The change is an increase in resources and an increase in aerial resources in terms of monitoring. You cover a far bigger area than if you are dealing exclusively with foot patrols,” he said.
Problems persist along the entire coal network, but Waller said additional service providers have been brought in to bolster the night shift security on 750km of coal line from Mpumalanga to Richards Bay. He says TFR has doubled the day shift.
“We have definitely seen some gains — and the true gains we have started to see now, in January. It is a battle we are winning at this stage,” said Waller.
TFR says it is under siege by the rampant vandalism, theft and sabotage across its rail network.
Ali Motala, general manager for strategy at Transnet, said TFR’s poor level of performance “is sad for each and every one of us who is a citizen of the country. South Africa has lost the opportunity to derive value from what has been a good season for commodity prices after the onset of the Covid-19 pandemic. We have lost the opportunity to create additional jobs and earn dollar-based revenue.”
However, Motala believes the railway system is functioning despite the setbacks and says there is a silver lining given that coal producers posted profits during 2021.
“The losses to the industry pale in comparison to what South Africa has lost. There are families whose breadwinners have lost their jobs as a result of the crime, vandalism, theft and sabotage of our railways.”
He said due to crime, TFR spends much money replacing stolen components, and beefing up security by paying for additional drones and helicopters. “This year alone we are projecting that we will spend over R1.5bn on security to guard the rail network.” He said extensive collaboration with industry to strengthen security is yielding results.
The lack of locomotives as a consequence of not being able to procure spare parts is another stumbling block TFR is working to overcome, Motala said. “We would have a better rail cycle if we had better locomotive availability and no crime — the one exacerbates the other.”
Motala said in a push to address locomotive availability, Transnet is testing alternative solutions with new prototypes of original parts.
He believes SA’s triple ills of unemployment, poverty and inequality are the root cause of crime. “We have to address the causes of the crime, we have to create jobs and fix the foundations of building a strong economy.”
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