Mining sector losing more than R800 mln a day due to Transnet strike: Minerals Council

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The Minerals Council of South Africa says the country’s mining companies are losing more than R800 million in export revenue per day due to the ongoing Transnet strike.

The council says harbours are currently operating at between 12 percent and 30 percent of their daily averages due to the strike.

On average, South Africa exports about 476 000 tons of bulk minerals a day worth more than R1 billion.

But, it is currently only able to ship out 120 000 tons of minerals a day.

Agricultural sector

Transnet says it will engage with the agriculture sector to see how they can make rail infrastructure more accessible.

Members of unions United National Transport Union (Untu) and the South African Transport and Allied Workers Union (Satawu) at the state-owned rail and freight company are on a wage strike.

Transnet has tabled a 4.5%  wage increase offer which the unions have rejected.

Satawu is demanding a 13.5% increase and Untu a 12% increase.

Transnet CEO Portia Derby, speaking on the side-lines of the Agri SA conference in Pretoria, says, “Agriculture is one of the biggest employers, you know three problems, unemployment, inequality and low growth. And so anything that we as Transnet can do to help deal with those three problems, we are going to be there front and centre.”

“Secondly agriculture is a big exporter and that is how it has grown over the last decade or so and needs to comply with the low carbon emissions and so rail increasingly becomes important for the sector. And so we need to figure out with the sector how we can make rail accessible to them despite its very high cost.”

Devastating for the country’s economy

On Thursday, the Head of Ports, Transport and Logistics at law firm, Bowmans, Andrew Pike issued a stern warning that the impact of a prolonged Transnet strike is likely to be devastating for the country’s economy.

Pike said the strike is a huge blow to an already struggling economy.

‘For each day of lost productivity, it takes 9/10 days to recover that and we have containers stacked up there that exporters are unable to come and collect, potentially they are running massive storage costs but trucks can’t come into the port to collect. You have thousands of truck drivers who are earning nothing at the moment, you have fleet operators who are trying to meet their financial commitments because if a truck is not working it is no earning. It is an unquantifiable loss which is a real problem and a there’s a knock-on effect and a huge blow to the economy.”

VIDEO: Full interview with Andrew Pike:

Additional reporting by Reuters