Problems with ports and railways block benefits of commodity boom, says Mantashe

Mineral resources and energy minister Gwede Mantashe says SA is open for business despite the energy crisis and logistical constraints that have hampered the prospects of bulk commodity exports.

Speaking at the Investing in African Mining Indaba in Cape Town on Monday, Mantashe acknowledged the mining industry was not fully benefiting from the commodity boom due to inefficiencies at railways and ports.

“The mining industry relies heavily on efficient railways and ports for export logistics. The logistical bottlenecks on railways and ports continue to contribute to the decline in export volumes of bulk commodities such as coal, iron ore, manganese and chrome,” said Mantashe.

Earlier on Monday, Minerals Council SA chief economist Henk Langenhoven said the country was losing out on making the most of bulk commodities at a time when prices were strong.

He said if the rail network were operating at its full capacity, with a few minor enhancements the country would realise R151bn more in bulk mineral sales.

To address the inefficiencies, in December, Transnet and the council established a partnership to maximise the potential of bulk commodities.

Mantashe said that in addition to the logistical deterioration, Eskom’s inability to supply power consistently had contributed to the decline in mining production in 2022, and the government was addressing its energy constraints through diversifying sources of power.

“We are not giving you problems. We are telling you what our vulnerabilities are,” he said, adding that mining investors could propose solutions.

Mantashe said the government’s scrapping of the licensing threshold for private energy generation highlighted its commitment to finding solutions.

He said although the government was introducing independent power producers to the national grid, those would not immediately address the load-shedding challenges.

“If you approve it, it won’t resolve load-shedding over the weekend,” he said.

SA experienced power supply disruptions in 2022, which “led to a decline in mineral production across all commodities. In November 2022, mining production contracted by 9%, marking a 10th consecutive month of contraction in volumes produced”, Mantashe said. 

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