The EU would normally expect that it would obtain most of its coal imports from South Africa, now that Russian coal imports are totally banned.
Due to major & daily (& seemingly "permanent") power blackouts, & major logistical problems with their rail networks taking coal etc. to the ports, South Africa's coal exports (as with other mineral companies there) are being imperilled. Some miners have had to abandon the unreliable rail transport, & resort to sending coal to ports (some outside South Africa!) by trucking it, which is
much more expensive.
Will the reduction in profitability for miners cause a reduction in their coal etc. exports? Their mining companies are complaining.
The Daily Investor S. Jacobs 5.6.23 said
"Mining companies and their CEOs have been outspoken about the impact of Transnet on their operations in their latest trading updates.In its preliminary results, Glencore pointed to logistics and port constraints as the reasons for its limited chrome ore supply from South Africa.
Its coal profits were also limited by “continued rail constraints”, exacerbated by a two-week Transnet strike.
Exxaro’s coal production decreased by 11% in 2022 “due to the poor rail performance from Transnet” and the “structural constraint of inadequate electricity supply”.
It has begun trucking coal to alternative ports to ensure it can meet export demand...
Kumba Iron Ore had “lower throughput than expected” in 2022, with its production and sales disrupted by Transnet’s inefficient services and the prolonged strike.
Kumba has a “significant build-up of iron ore stockpiles” at their mines. Due to Transnet’s rail constraints, iron ore cannot be transported for export.
Production at Kumba’s mines has decreased as the company ran out of space to store its iron ore prior to export. “This is not a crisis. It is a catastrophe,” Baxter said.
Mining companies have resorted to trucking their material to ports outside South Africa, such as Maputo, to avoid logistical backlogs.
This comes at a high cost for mining companies. For example, transporting coal to Richard’s Bay Coal Terminal via rail costs around $11 per ton, while trucking costs companies roughly $70 per ton.
Miners can absorb this additional cost for now. However, if commodity prices decrease, trucking will not be viable for many companies.
This may result in some companies closing their mines as they cannot get their product to market via Transnet’s rail and ports".
https://dailyinvestor.com/south-africa/19066/south-african-rail-and-ports-catastrophe/Thanks
@keith200 for your recent post- it shows the very poor profits that TER is currently making in South Africa, for its coal exports.
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