EBC Monetary Group notes the current transport knowledge Exxaro exhibits why greater port capability might not shield export margins if manganese continues to maneuver by truck as an alternative of rail, with 46% of Tshipi Borwa mine volumes nonetheless hauled by street
South Africa’s manganese exporters might lose margin earlier than their ore reaches port if an excessive amount of quantity continues to maneuver by truck as an alternative of rail. Exxaro just lately stated street haulage prices 37% greater than rail, whereas logistics account for 43% of free-on-board (FOB) export prices. FOB refers to the price of transferring cargo as much as the purpose the place it’s loaded onto a vessel. That is vital as Transnet Rail Infrastructure Supervisor stated 11 personal Prepare Working Corporations had concluded rail entry agreements, with some operators concentrating on mainline entry earlier than the top of 2026 and most anticipated to grow to be operational throughout 2027. For manganese exporters, the precedence is getting sufficient ore off vans and onto rail to deliver down inland transport prices.
David Treasured, Senior Market Analyst at EBC Monetary Group, stated, “Larger port capability might assist South Africa load extra manganese for export, however it might not shield margins if an excessive amount of ore nonetheless travels by street from the Northern Cape. At Tshipi Borwa, a serious manganese mine within the Kalahari Manganese Subject, Exxaro’s knowledge exhibits about 46% of volumes are nonetheless trucked, and street haulage prices 37% greater than rail. Meaning exporters might quit worth earlier than the cargo reaches the port.”
Beforehand, EBC Monetary Group (EBC) famous that the deliberate 16-million-tonne Ngqura manganese terminal within the Japanese Cape may strengthen South Africa’s export capability, however its industrial worth might rely on whether or not rail entry improves sufficient to scale back street haulage. Exxaro’s newest transport knowledge now provides a clearer price dimension to that concern. This makes the difficulty much less about port capability alone and extra about whether or not manganese exporters can decrease the price of transferring ore from inland mines to coastal ports.
Inland Transport Stays the Margin Strain
Tshipi Borwa exports about 3.5 million tonnes of manganese a yr, with about 46% nonetheless hauled to ports by street, in response to Exxaro’s June presentation. Meaning greater than 1.5 million tonnes from one giant mine nonetheless makes use of the higher-cost route earlier than reaching export channels by means of Gqeberha and Saldanha.
A brand new port terminal might elevate loading capability, nevertheless it doesn’t robotically decrease transport prices as a result of the ore nonetheless has to journey a whole lot of kilometres from inland mining areas to coastal ports. If a big share of that journey stays on vans, exporters might face tighter mine margins, much less aggressive delivered pricing, and better publicity to gas prices, truck availability, street congestion, and delays round port areas.
The problem is commercially vital as Exxaro just lately entered manganese at scale by means of Tshipi Borwa, a serious mine in South Africa’s Kalahari Manganese Subject. If nearly half of the mine’s export volumes nonetheless transfer by street, transport prices might immediately have an effect on the worth Exxaro can draw from the asset. This makes rail entry vital not just for South Africa’s export system, but in addition for Exxaro’s capacity to guard margins in its manganese enterprise.
Rail Supply might Determine How A lot Value Strain Eases
Rail reform might now be measured by means of working knowledge reasonably than coverage bulletins alone. The 11 personal prepare operators are anticipated so as to add 24 million tonnes of freight capability throughout coal, manganese, containers, gas, and common freight, whereas the broader private-access course of covers 41 routes throughout six corridors. Prepare slots are scheduled rights to run freight providers on outlined rail routes. For manganese, these slots might solely enhance competitiveness in the event that they grow to be working trains, cut back the ore quantity moved by street, and join with ports which can be able to obtain and unload greater rail volumes.
“Manganese exporters might profit if personal rail entry results in extra prepare actions, decrease street use, and smoother supply into port. The profit might seem in margins, reliability, and export competitiveness.” Treasured added, “If rail supply is gradual, South Africa should export quantity, however at a better inland price than obligatory.”
Tshipi Borwa’s rail share, personal prepare operator begin dates, rail slot supply, port offloading readiness, and whether or not manganese exporters cut back trucking publicity throughout 2026 and 2027 would be the vital indicators to look at. Collectively, they could present whether or not South Africa is enhancing the total export route from the Kalahari mine to the vessel or primarily including port capability whereas inland prices stay beneath strain.
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Supply: EBC.
Picture credit score: EBC.
