Refinitiv Newscasts - S.African miners turn to trucks as rail declines

Mercuria Holdings

03/05/2022 17:14

Click the following link to watch video: https://share.newscasts.refinitiv.com/link?entryId=1_34oblrp2&referenceId=tag:reuters.com,2022:newsml_OV546603052022RP1_930&pageId=RefinitivNewscasts
Source: Reuters

Description: Mining companies in South Africa have resorted to trucking coal
to ports to meet a surge in European demand since the war in Ukraine started,
bypassing the deteriorating rail infrastructure they blame for billions of
dollars in lost revenue. Olivia Chan reports.
Short Link: https://refini.tv/3vDQaKl

Video Transcript:

This is what mining companies in South Africa have resorted to, trucking coal
to ports in order to meet a surge in European demand since the war in Ukraine
started. The switch to trucking bypasses the deteriorating rail infrastructure
that companies had costs millions of Dollars in revenue. Poor maintenance, a
lack of spare parts for trains, copper cable theft, and vandalism have
disrupted state logistics firm Transnet Freight Rail's services, causing coal
and iron ore exports to fall in recent years. Clifford Hallatt is the Chief
Operating Officer at Canyon Coal, a joint venture between miner Menar and
commodity trader Mercuria. 

April-March of 2021, we started experiencing issues with Transnet,
availability of their trains, them being able to give us sufficient amount of
trains required to move our product from the mines, from this mine, and the
other mines within the Menar group.

Trucking coal costs about four times more than rail, according to Hallatt. At
Canyon Coal's Khanye Colliery, it takes about 80 trucks, each carrying over 37
tons, to replace one average Transnet train, making it unsustainable
financially as well as boosting emissions and clogging roads. Transnet Freight
Rail Chief Executive Sizakele Mzimela: 

We are aware that there's been an increase in the number of trucks- of coal
trucks now running into the ports, and that's not a good situation. And for
me, it's not a good situation for the country, more than anything in terms of
the damage to the roads and the congestion on the roads as well. 

The record-high coal prices means miners can absorb the cost of trucking for
now. Demand for coal has shut up since the war in Ukraine started. The EU has
announced a ban on Russian coal and mining companies in South Africa say
they're fielding calls from European countries looking for imports