TRANSNET has stepped up work to restore capacity on South Africa’s iron ore export line as miners push for faster improvements to a corridor that has hampered production and investment in the Northern Cape.
The 861km Sishen-Saldanha line is undergoing an R8.9bn restoration programme running to 2030, Transport Minister Barbara Creecy said during a visit to the corridor on Monday.
About R2.2bn is being spent on restorative maintenance in the current financial year.
The latest work forms part of the annual shutdown of the line from October 6 to 16, Transnet said in a statement.
It includes rail and sleeper replacement, ballast screening, turnout work, formation rehabilitation and electrical and signalling upgrades. Transnet said the work was aimed at improving reliability and increasing capacity for future freight demand.
Kumba Iron Ore CEO Mpumi Zikalala said at last week’s Joburg Indaba conference that the miner had been forced to “reconfigure” its business for "a lower base” because logistics constraints meant it could no longer plan production at previous levels.
“But we don’t want to be where we are because in order to be competitive as a business, we actually need to up our volumes,” she said.
Kumba previously reconfigured its operations to align production with Transnet’s constrained rail capacity.
Production is forecast at 31 million to 33 million tons this year, partly due to work on the ultra-high dense medium separation (UHDMS project at Sishen, before rising to 35 million to 37 million tons in 2027.
The company has said its production plans hinge on Transnet’s logistics performance. The extent to which Kumba can rebuild volumes will therefore depend partly on further improvements on the iron ore corridor.
Rail performance has stabilised after years of deterioration, but Zikalala said the improvement is still not enough.
“We’ve seen stability when it comes to performance, but I underline stability because it’s stability with marginal gains,” she said. “There’s still a lot that needs to be done.”
Restoring the network would need “capital, it requires skills, and it requires speed”, she added.
The iron ore line is particularly important because bulk miners rely on moving large volumes at competitive costs.
South Africa accounts for less than 5% of global iron ore supply and its Northern Cape producers compete against much larger international rivals.
In a separate discussion with Joburg Indaba chair Bernard Swanepoel, Zikalala pointed to another disadvantage – Kumba has to move its iron ore more than 860km from its mines to the port.
“So we are further [away] than those we compete with,” she said.
Investment continues
The logistics constraint comes as Kumba continues to invest in extending the productive life of its Northern Cape operations.
The company is spending R11.2bn on its UHDMS project at Sishen, which will allow lower-grade material previously classified as waste to be processed as ore.
Zikalala said the technology could also allow Kumba to process lower-grade material accumulated over Sishen’s more than 70-year history.
Kumba is also continuing exploration around its Northern Cape operations. Zikalala said the company had more than 1.5 billion tons of resources and reserves and had added to its resource base through exploration.
She identified Ploegfontein and Heuningkranz, near Kumba's Kolomela mine outside Postmasburg, as areas where the company continued to explore.
Zikalala said Kumba and the other members of the Ore Users Forum were working closely with Transnet during the restoration programme. The forum represents four major iron ore producers and works with Transnet to improve rail and port performance.
“We ask Transnet if there’s anything that they need, and if there is, we jump because we understand that we can only be successful when the corridor and Transnet are successful,” she said.