Transnet’s rail and harbour capacity has been entirely overwhelmed by South Africa’s surging manganese production over the past decade. In 2011, South Africa exported less than five million tonnes of manganese. But production and export volumes have steadily climbed since then, increasing four-fold to 19.16 million tonnes in 2021. 96 percent of South Africa’s manganese production is exported.

Manganese is an essential element in steelmaking where it is used as an alloy to add strength and flexibility to the final product. South Africa is the world’s most significant manganese mining jurisdiction by some distance, possessing the world’s biggest high-quality deposit, located north-east of Kuruman in the Northern Cape. South Africa holds nearly 80 percent of the world’s known high-grade manganese reserves and accounts for over 40 percent of global exports of the metal, mostly (over 70 percent) to China.

However the increase in South African exports of manganese coincided with the ‘capture’ of Transnet between 2009 and 2018, detailed in Part 2 of the Zondo Commission’s Report on State Capture, Corruption and Fraud in the Public Sector. While much of the Report focussed on racketeering in procurement, worth, according to the commission, ZAR41.2 billion, an incidental side effect was the parastatal’s failure to adequately develop and maintain bulk export infrastructure.

The inadequacy of the country’s two dedicated bulk export lines – Sishen-Saldanha (mostly iron ore) and Mpumalanga- Richards Bay (coal) – has elicited widespread comment. The Minerals Council of South Africa (MCSA) says that failings on these lines cost the industry ZAR50 billion in lost opportunities in 2022. Manganese, which accounts for about five percent of mineral exports by value, has gone largely unnoticed but the export process has been chaotic.

Transnet’s failings have offered opportunities to other players. Namibian logistics parastatal Namport and the Port of Luderitz Bay have seized the moment. And a new cross-border value chain has been created. Luderitz Bay is about the same distance from the Northern Cape manganese field as Gqeberha (formerly Port Elizabeth), the site of Transnet’s only dedicated manganese terminal. But Luderitz Bay appears to be a more efficient option and has set out to maximise the opportunity.

Manganese exports through Luderitz Bay are expected to total 720 000 tonnes in 2022, effectively doubling volumes since 2019. This may be an underestimate; last December Namport newsletter Quayside carried an article which said that Luderitz has exported nearly half-a-million tonnes of manganese in the previous seven months. Namport is developing further capacity and intends eventually exporting 2.1 million tonnes of South African manganese every year. A contract to develop and operate a Common Use Manganese Export Terminal (CUMET) at the Port of Luderitz was awarded to a Bidvest subsidiary this year.

Prior to the manganese bonus, Luderitz had been largely a fishing port. The manganese ore is received via road and rail from the Northern Cape via the Ariamsvlei Border Post and then loaded onto 92 000 tonnes post-Panamax ore-carriers by barge. These big ships cannot come alongside the quay as Luderitz is too shallow and the hard rock on which it is located renders dredging unviable.

In South Africa’s Eastern Cape, the 5.1 million tonne Gqeberha manganese terminal has aged badly. Established in 1976, the site is a major source of dangerous trace element pollution and is located in the centre of the city, precisely where the local authority would like to establish a tourist-friendly waterfront.

Transnet’s plan, for many years, has been to relocate the terminal to the nearby port of Ngqura (Coega). In 2011, then CEO of Transnet Brian Molefe, told a business breakfast in Port Elizabeth the first shipments could be expected in 2016. At the time, Transnet had promised to construct a new heavy haul line from Hotazel, at the centre of the Kalahari manganese field, to the Port of Ngqura. The parastatal in 2011 that said it planned to raise capacity to between 16 million and 18 million tonnes per year. The logistics parastatal also made it clear that it did not intend falling-in with the mining industry’s preference for exports via the much cheaper alternative of Saldanha Bay.

Despite Transnet’s promises, very little of this infrastructure development actually happened. The request for proposals for the development of the manganese terminal at Ngquera only went out in October 2021 and came from the Coega Development Corporation, not Transnet. The rail link between Hotazel and Gqeberha was never upgraded and the result has been a heavy use of road rather than rail for manganese exports. The congestion and well as wear of tear on infrastructure has been considerable. A 2021 traffic study of in Gqeberha found that 400 ore-carrying trucks were entering and exiting the manganese terminal every day.

In early 2020, Transnet’s chief customer officer was quoted as saying that the parastatal was using ‘every available port‘ to export manganese. In 2021, according to answers given by the minister of transport in parliament, Ngqura handled 2.15 million tonnes and the Port Elizabeth bulk terminal 5 million tonnes. The Port Elizabeth multi-purpose terminal handled 1.3 million tonnes.

The export capacity of the Sishen-Saldanha line has been increased in increments to its current 5.3 million tonnes/year. This was originally a dedicated iron-ore line but began carrying manganese in 2011, originally moving 60 million tonnes/year. Manganese miners themselves are keen to play their part in improving their loading capacities, which mean spending capital on their private rail sidings. Two of the biggest manganese miners, Assmang (African Rainbow Minerals) and South 32 have made announcements in the last year.

The process of getting South African mined manganese to market looks ad hoc and somewhat incoherent. Manganese bulk exports have not been developed in the organised and systematic manner that the coal and iron ore mining industries enjoyed. There have to be considerable doubts about Transnet’s capacity to develop a dedicated manganese export bulk line with associated infrastructure. Nor is the parastatal likely to want to surrender control to private operators. The Minerals Council of South Africa has long advocated Public-Private Partnerships as the solution to the industry’s logistical problems. But these bulk export lines account for 65 percent of Transnet Freight Rails revenue and the parastatal seems unwilling to loosen its grip.

This is good news for other Southern African ports looking to expand. Maputo is taking increasing volumes of chrome and coal exports. For Luderitz, the opportunity in manganese looks likely to prove transformative and so creating an important new cross-border value chain, linking road and rail transport networks.