Due to a shortage of locomotives and spare parts, cable theft, and vandalism, Transnet has been unable to meet mineral exporters’ demand for freight rail services.
According to Phoevos Pouroulis, CEO of bulk mineral exporter Tharisa Minerals, the company has been forced to truck 85% of its chrome export volumes to ports. In an interview with Reuters, Pouroulis said the company previously transported 80% of its chrome exports by rail because of its economies of scale and due to the ease of loading and offloading. Due to the lack of short-term solutions and the intense competition for the limited available rail capacity, he said the company had no choice but to adapt.
"We don't see a short-term solution on the horizon, but medium term, there needs to be public-private collaboration and possibly privatisation for the networks to be upgraded and maintained," said Pouroulis.
South Africa is the top supplier of chrome, used in the production of stainless steel, to China, accounting for up to 10% of China’s demand for chrome.
Tharisa published its half-year earnings on Friday, reporting that it had produced 788 000 tonnes of chrome concentrate in the half-year to March 31, showing an increase of 1.4% during the previous year, compensating for lower Platinum Group Metal prices and production on group earnings.
Tharisa’s half-year headline earnings per share were $0.176, showing an increase from $0.155 during the same period last year.
However, the added cost of road freight had driven the company’s on-land logistics costs up by 8.9% in the first half of the year.
