South Africa’s new deep-water harbour Ngqura, in the Eastern Cape, is the logical choice for any large-scale expansion of South Africa’s manganese exports, Transnet Freight Rail’s (TFR’s) newly reinstated CEO Siyabonga Gama argues.
He acknowledges that the manganese miners have expressed a preference for expanding the Sishen-Saldanha channel to a two commodity line, involving both iron-ore and manganese.
He also accepts that a study is still under way to determine the size of the ramp-up, as well as whether it would be best to direct the expanded manganese exports through Saldanha, or through Ngqura.
However, he is convinced that a heavy-haul channel to Ngqura and the establishment of a terminal in the Coega industrial development zone will make more sense for the country, for the industry and for Transnet.
He even asserts that the so-called ‘go east’ option could shave up to R3-billion off a project price tag currently estimated at between R12-billion and R15-billion.
The country currently exports less than five-million tons a year, primarily through Port Elizabeth. But Transnet has indicated that it is committed to both expanding the level of exports and to vacating the existing manganese terminal at Port Elizabeth by 2017.
Gama expects that some 5.5-million will be exported in 2011/12, but that given demand projections for the steelmaking material plans also need to be put in place to raise that capacity to between 16-million and 18-million tons.
“I already know that we do iron-ore through Saldanha, and that we do manganese through Port Elizabeth, where Ngqura is. I also know now that there is going to be a manganese smelter at Coega and that there is already a manganese industry in PE. I also know that, while the capacity on the Sishen line is taken up, we have spare capacity to PE. We also have a deep port, with a berth at Ngqura where we just have to build a terminal. So, why do I need a study,” Gama quipped.
He believes the mining companies are pressing the Saldanha option on the basis of an “unrealistic” expectation that they will receive the same “subeconomic” tariff that is currently being extended to iron-ore miners in the Northern Cape.
He also dismisses the efficiency argument, saying that there is nothing to stop the Ngqura channel form being as efficient, particularly if a new heavy-haul line is developed.
“Today you don’t see it, but such a line must be there. You can’t have a deep-water port without a heavy-haul line. All our deep-water ports have got heavy-haul lines – that’s how deep-water ports work.”
Such a line could run some 150 km from Hotazel, where manganese mining is centred, to Kimberley, and from Kimberley, 400 km to the Port Elizabeth area.
“If you juxtapose that 550 km of rail with upgrading 861 km of rail, you again don’t need a study.”
The manganese project could involve various commercial structures, as well as partnerships.