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South African coal miners turn to trucks as rail service deteriorates

4 May 2022, 9:00 PM  |
Reuters Reuters |  @SABCNews
South Africa's coal mine.

South Africa's coal mine.

Image: Reuters

South Africa's coal mine.

Mining companies in South Africa have resorted to trucking coal to ports to meet a surge in European demand since the war in Ukraine started, bypassing the deteriorating rail infrastructure they blame for billions of dollars in lost revenue.

Poor maintenance, a lack of spare parts for trains, copper cable theft and vandalism have disrupted state logistics firm Transnet’s freight rail services, causing coal and iron ore exports to fall in recent years.

In April, Transnet declared force majeure on contracts with producers but with coal prices near record highs, mining firms including Glencore have turned to trucks, one industry source said. A Glencore spokesperson declined to comment.

Trucking coal costs about four times more than rail, according to miner Menar. It has started using trucks but said the high coal prices mean miners can absorb the cost, for now.

“The industry at large are on their knees, so they are resorting to drastic measures,” said Clifford Hallatt, chief operating officer at Canyon Coal, a joint venture between Menar and commodity trader Mercuria.

At Canyon Coal’s Khanye Colliery some 90 kilometres from Johannesburg, it takes about 80 trucks, each carrying 34 tonnes to replace one average Transnet train, making it unsustainable financially, boosting emissions and clogging roads.

But the company says it has little choice.

A year ago, it was loading five or six Transnet trains a week from Khanye. That has dropped to just two or three now, and its stockpiles of coal have been mounting, Hallatt said.

Demand, meanwhile, has shot up since the war in Ukraine. The European Union has announced a ban on Russian coal and mining companies in South Africa say they are fielding calls from European countries looking for imports.

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Tags: CoalConflictRussia-UkraineSouth AfricaEurope
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