South African state-owned logistics group Transnet plans to issue a tender for new locomotives in July with a shortage of trains available for mining industry customers to haul their products to the ports.

Coal and iron ore are the highest gross-weight volume mineral exports from South Africa and account for over one-third of export revenues annually. Platinum group metals (PGMs) make up the single largest export value with gold and manganese making up the rest of the top-five export revenues. For many of South Africa’s mineral exports, the domestic market accounts for only a minor proportion and with key mineral fields located in the interior of the country, logistic routes are a fundamental part to allow South Africa to join the global supply chain.

A shortage of trains is not a new topic and despite dedicated mineral routes (Sishen to Saldana iron ore, Hotazel to Gqeberha manganese, Rustenburg to Richards Bay chromium), producers of bulk ores have become creative in getting materials to port. Trucking has picked up much of the growth in these markets and alternative ports have leveraged competitive margins of commodities to expand facilities to handle a larger variety of export products.

Nevertheless, the situation has not improved and rather worsened over the COVID-19 lockdown period in 2020 when vandalism crippled arterial rail routes. Over 2022, high mineral prices saw a competition evolve between commodities to capture not only capacity to reach port but also compete for storage and shipping capacity. This made it increasingly difficult for the smaller value market like chromium to compete against better margins across the supply chain of South Africa’s manganese and coal industry.

In May, Transnet published a white paper identifying areas for investment and reform to improve the contribution of the railways to the economy. In short, the industry is cautiously opening to private investment, but even in the paper it is suggested that realising this potential is “complex and delicate”.