EDITORIAL: How Transnet is killing South Africa’s mines

Strip away the “keynote speeches” at the Mining Indaba and there’s a sense that, in the words of the Minerals Council South Africa, there are “red lights flashing” about the sector’s future. 

You wouldn’t think so, since South Africa’s mining production hit a record R1.18-trillion last year, thanks to sky-high commodity prices. But this really was the high-water mark — this year, production is estimated to fall 6%.

Yet the country has been unable to capitalise on this to the extent we should have, thanks to the (literal) train wreck that is Transnet, under CEO Portia Derby. Its freight rail division is in such disrepair that the country lost an estimated R151bn in potential sales last year.

Last year, the mining sector paid R88bn in company taxes and royalties — a windfall that took some of the sting out of load-shedding. This year we’re unlikely to have that to cushion the blow. 

As Minerals Council chief economist Henk Langenhoven points out, “net investment in new projects has dwindled to zero” despite the fertile environment. This reflects the lack of faith in the government’s ability to keep its trains on their tracks, and the lights on.