JOHANNESBURG (miningweekly.com) – Since the new leadership at State rail enterprise Transnet has began engaging with South Africa's mining industry, the level of transparency has been “much, much improved”, according to African Rainbow Minerals (ARM) Ferrous CE André Joubert.

Joubert, who was speaking during a question session covered by Mining Weekly, described the industry as being “very active” in engaging with Transnet on rail transportation of iron-ore and manganese ores'.

Noting the stance taken by Kumba Iron Ore to adjust its production to lower available rail capacity, Integral Asset Management CIO Bruce Williamson asked ARM about the stance that Assmang would be taking. (Also watch attached Creamer Media video.)

Including the railing of manganese in his answer, Joubert described the new Transnet leadership as almost opening its soul to the industry and recounted how the State rail enterprise had allowed producers to collectively do an independent technical assessment of the rail infrastructure.

The independent technical assessment, he said, had revealed that the state of the rail network had deteriorated to a point where it was going to take a lot of effort and money to get it back to nameplate capacity.

This had resulted in the industry collectively working very closely with Transnet with various programmes being implemented.

“Based on that, you are looking at about 87% to 88% of nameplate capacity and we did adjust our rail volume to that.

“We definitely see for the next three to five years that we will be working at that level. Of course, we pray that it will be quicker than that but we can’t base our strategy on hope.

“There is going to be more time out so that we can have long-term sustainable improvements on the iron-ore line.

“On the manganese side, we invested quite a lot of capital in our Black Rock mine to produce 4.5-million tons per annum.

“When this year started, we planned for close to four-million tons and we said that the portion that Transnet was not going to do would be transported by road.

“We started off doing that but with the prices dropping, it became very evident that road transport is not profitable and we took the decision to stop the road transport.

“Road haul does not make sense for us so therefore every ton previously road-hauled might as well be left underground and expenditure be delayed until such time as Transnet get their act together, and again, this decision was taken collectively.

“There are a lot of projects happening. If you look again, we took a realistic view that next year we’ll rail 3.4-million tons of manganese and then we’ll push that up to 3.7-million tons and then to four-million tons.

“Our mine is set up for that, we can do that, but for now we have to look at repurposing our mine and setting out to manage the grade.

“That’s our strategy and we are marrying that strategy exactly with the information that we have from Transnet. So, for us, road hauling is done only if there is a serious emergency and we need to fill a ship,” Joubert explained.