EBC Monetary Group notes the latest transport knowledge Exxaro exhibits why larger port capability could not shield export margins if manganese continues to maneuver by truck as a substitute of rail, with 46% of Tshipi Borwa mine volumes nonetheless hauled by street
South Africa’s manganese exporters could lose margin earlier than their ore reaches port if an excessive amount of quantity continues to maneuver by truck as a substitute 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 non-public Practice Working Corporations had concluded rail entry agreements, with some operators concentrating on mainline entry earlier than the top of 2026 and most anticipated to develop into operational throughout 2027. For manganese exporters, the precedence is getting sufficient ore off vans and onto rail to convey down inland transport prices.
David Valuable, Senior Market Analyst at EBC Monetary Group, stated, “Greater port capability could 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 significant 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 could hand over 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 Jap Cape may strengthen South Africa’s export capability, however its industrial worth could depend upon whether or not rail entry improves sufficient to scale back street haulage. Exxaro’s newest transport knowledge now provides a clearer value dimension to that concern. This makes the problem 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 12 months, with about 46% nonetheless hauled to ports by street, in line with 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 via Gqeberha and Saldanha.
A brand new port terminal could elevate loading capability, but it surely 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 could face tighter mine margins, much less aggressive delivered pricing, and better publicity to gasoline prices, truck availability, street congestion, and delays round port areas.
The problem is commercially vital as Exxaro just lately entered manganese at scale via Tshipi Borwa, a significant mine in South Africa’s Kalahari Manganese Subject. If nearly half of the mine’s export volumes nonetheless transfer by street, transport prices could instantly 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 additionally for Exxaro’s capacity to guard margins in its manganese enterprise.
Rail Supply could Determine How A lot Price Strain Eases
Rail reform could now be measured via working knowledge quite than coverage bulletins alone. The 11 non-public prepare operators are anticipated so as to add 24 million tonnes of freight capability throughout coal, manganese, containers, gasoline, and common freight, whereas the broader private-access course of covers 41 routes throughout six corridors. Practice slots are scheduled rights to run freight companies on outlined rail routes. For manganese, these slots could solely enhance competitiveness in the event that they develop into working trains, cut back the ore quantity moved by street, and join with ports which might be able to obtain and unload larger rail volumes.
“Manganese exporters could profit if non-public rail entry results in extra prepare actions, decrease street use, and smoother supply into port. The profit could seem in margins, reliability, and export competitiveness.” Valuable added, “If rail supply is gradual, South Africa should export quantity, however at the next inland value than obligatory.”
Tshipi Borwa’s rail share, non-public 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 bettering the total export route from the Kalahari mine to the vessel or primarily including port capability whereas inland prices stay beneath stress.
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Supply: EBC.
Photograph credit score: EBC.
