SA’s rail and port network causes significant losses of revenue for mining

The state of South Africa’s rail and port network is resulting in significant losses of revenue for many sectors of the economy and is depriving the country’s fiscus of much-needed taxes. Kumba, together with the Ore User’s Forum, is continuing to work with Transnet, the government, and other stakeholders to remove barriers and to improve the performance of the iron ore and manganese logistics network.

“We look forward to working with the new leadership at Transnet and are encouraged by the constructive efforts of the National Logistics Crisis Committee in promoting public sector partnership through the Freight and Logistics Roadmap, said Kumba in its press release.

“Despite ongoing logistics constraints, resulting in ore railed having decreased by ~15% since 2019, Kumba has continued to support local host communities. Over the past four years, our local procurement spend of R18.4 billion has helped to support local livelihoods and we have invested R1.4 billion in community healthcare, education, skills development and infrastructure. However, as we continue to face logistics challenges, we must ensure that our business is cost competitive so that we can continue to create enduring value for all our stakeholders.

“This year, Sishen celebrates its 70th year of operations in the Northern Cape where we have played a critical role in the local economy. With the actions we are taking to ensure that our business is resilient and sustainable, we will be well placed to continue supporting our local communities for years to come. We are focusing on the areas that we can control and building the flexibility required to operate in volatile macro scenarios with a more effective organisation to deliver our strategy in a sustainable and affordable manner.

“Over the long term we remain positive about iron ore fundamentals. The adoption of Scope 3 carbon reduction interventions by steel manufacturers will continue to support demand for Kumba’s high quality iron ore products. We are working with over 30 percent of our customers (by sales volumes) to help develop steelmaking technology with a lower carbon footprint and the decarbonization of our own operations will also ensure that we are well placed to participate in the green steel market.”