Issues affecting South Africa’s coal exports

I recently took part in a panel discussion at the 19th Annual Southern African Coal Conference in Cape Town. This was an opportunity to share some insights on crucial factors affecting South Africa’s (SA) coal exports, including the Transnet crisis.

Transnet’s ongoing issues have created a dilemma for us as coal producers. Rail inefficiencies along with congestion at the country’s ports have had a knock-on effect on the industry’s performance. When the coal price is favourable, we can cope with trucking costs. But when coal prices fall, we resort to stockpiling. If the stockpile area gets full you might have to reduce production and risk retrenching people.

Despite these challenges the coal sector has worked hard to avoid retrenchments. We keep operations moving to secure jobs and maintain our contribution to the economy. Last year SA shipped 47.2 Mt of coal, the lowest volumes the country has seen since 1992. Meanwhile, other producers in the market like Indonesia doubled their coal exports.

The opportunity losses have been immense and the need for a solution is urgent. I believe that there is no need for a parallel structure like the National Logistics Crisis Committee to resolve these problems. Transnet needs to secure locomotives and deal with the leadership vacuum by filling in essential vacancies like CEO position. The government has committed to fixing the problems but we need to see results.