South Africa, the world’s largest producer of manganese, a key component of lithium-ion batteries, is set to increase its metal exports thanks to a new port facility built by a private company.
The Logistics Group, owned by Old Mutual Ltd.’s African Infrastructure Investment Managers, has constructed the Saldanha Dry Bulk Terminal, a storage facility that can accept 100 tons per wagon, compared to the 63 tons that existing operations in the area can process, according to its CEO Anton Potgieter.
The facility will enable increased volumes of manganese to be offloaded from one of the world’s longest freight trains, which runs for 861 kilometres (535 miles) from the mines in Sishen to the Port of Saldanha on the west coast. The train comprises 375 wagons and is operated by Transnet SOC Ltd., the state-owned port and rail company.
Transnet has been struggling with corruption, mismanagement, and a shortage of locomotives, which have reduced its transport capacity and efficiency. The company reported a 5.7 billion rand ($303 million) loss for the year ending March 31, 2023, and has requested a government bailout to fix its finances.
The Logistics Group submitted a proposal on the Saldanha facility that was “well received” by Transnet, which will help reduce the number of trains needed on the line once the site is operational, Potgieter said. The company took a “leap of faith” and built the 200 million rand ($11 million) project without signing a single contract, he added.
The project is expected to benefit the country’s economy, which relies heavily on mineral exports. Manganese is the fourth-most used metal globally by tonnage, and South Africa has about 80% of estimated global reserves. The metal is used in steelmaking and is also a vital ingredient for electric vehicles, projected to grow in demand as the world shifts to cleaner energy sources.
The Minerals Council, a lobby group representing most mining companies operating in the country, estimates that poorly run ports and freight-rail lines may have cost the country 150 billion rand ($8 billion) in exports last year. The council has welcomed the private sector’s involvement in improving the logistics infrastructure and has urged the government and Transnet to work together to ensure the safety and competitiveness of the industry.
The Saldanha Dry Bulk Terminal is one of the examples of how private companies are stepping in to fill the gaps left by Transnet’s underperformance. The Logistics Group has also expanded its operations to Mozambique, Namibia, and Tanzania, handling cargo such as cement, fertilizers, containers, and fruit.
The company’s roots go back to a co-operative owned by farmers, who used it to export their produce. Potgieter said the company has grown rapidly and has seized the opportunities created by Transnet’s downward spiral. “With Transnet’s downward spiral, there was a lot of cargo that came available for private operators in the ports,” he said.
The new port facility is expected to be operational by early 2024 and will boost South Africa’s position as a leading supplier of battery metals to the global market.
Source: Bloomberg
