PRIVATELY-owned coal and manganese miner Menar threw its weight behind embattled Transnet, South Africa’s state-owned freight and logistics firm, saying manganese volumes were likely to increase following recent investment.
“The improvement in efficiencies and commitment to increasing capacity on the railway line bodes well for the future of the South African manganese sector,” said Menar chairperson, Mpumelelo Mkhabela in a statement on Thursday.
Transnet has been the target of fierce criticism in the last 12 months following a decline in trains availability on the coal export line to Richards Bay Coal Terminal. PwC, the auditor, estimated South Africa’s coal sector was facing an opportunity cost of $4.5bn this year compared to 2020 owing to rail constraints.
It used 2020 as the comparator because that pre-dated the spate of theft, vandalism and industrial sabotage events on the coal line.
However, Transnet is to increase the number of trains that transport manganese to Nelson Mandela Bay, a port in the Eastern Cape, from 31 to 35, said Menar. “This will aid in increasing the capacity of the line to transport 12 million tons (Mt) per annum of manganese ore from Hotazel in the Northern Cape to the Port of Ngqura,” said Mkhabela.
Menar officially entered the manganese market in the teeth of the Covid-19 when it opened the 30,000 tons of ore per month (run of mine) East Manganese mine held via Menar subsidiary, Sitatunga Resources. East Manganese was the only mine in South Africa to open during the pandemic.
“We hope to make an announcement about potentially developing a new mega manganese mine early next year,” Mkhabela said.
New investments in coal – which forms the backbone of Menar’s business – were unlikely in the short-term as the company was currently rolling out a raft of organic projects. Currently, production is 7.5Mt a year (ROM) of thermal and anthracite coal.
“We are currently in the process of developing and seeking regulatory approvals for a couple of mega-coal projects, which would be able to supply Eskom (if called upon to do so) and expand our supply to the export market,” said Mkhabela.
Menar’s R7bn investment in thermal coal, anthracite coal and manganese from now to 2025 will create over 2,500 jobs, the company said. Thermal coal and anthracite investment includes expanding production capacity of existing mines as well as developing new ones from scratch, it added.