Transnet and South32 have signed a seven and a half year Manganese Export Capacity Allocation contract. This contract will allow for the transportation of 2.6 million tons of export manganese per annum and realise close to R10.4 billion in total value for Transnet.

Furthermore, it will provide security for exported manganese volumes to Transnet and security of export rail and port logistics to customers.

Welcoming the signing of the agreement, Gert De Beer, chief new business development
officer at Transnet, comments that they are pleased with reaching this key milestone with South32.

“The signing of such a contract speaks to Transnet’s commitment to supporting the mining
industry in South Africa.

“This contract will be followed by other important players in the manganese sector and will result in a secure and robust manganese export volumes for our European and Chinese markets,” he continues.

Transnet together with key manganese producers have set aside 15% of the overall manganese export line capacity for the new entrants in the manganese export market.

“The 15% capacity allocation was made available to encourage new and emerging entrants to take part in mining activities in the country,” adds De Beer.

Transnet plans to sign similar contracts with nine local manganese producers, including
South32, which will see a total of 12.5 Mt of manganese per annum transported mainly from the Hotazel area in the Northern Cape through the Saldanha and Port Elizabeth ore railway lines.

“We are pleased to have reached an agreement with Transnet which supports the base production plans of our manganese ore business,” comments South32 Manganese South Africa Operations VP Lucas Msimanga.

“This contract provides a stable base for the execution of export sales, with no significant
exposure to the business during market down cycle.

“Furthermore, it demonstrates the strength of the relationship between South32 and Transnet as it underpins the value of both businesses,” adds Msimanga.

The seven and a half-year contract will be back-dated from September 2015 until March

The contract term is aligned with Transnet’s Manganese Expansion plans to create
capacity ahead of demand in freight, ports, terminals and rail systems in the country.

Transnet’s manganese expansion programme will increase the commodity’s export capacity through the update of the rail network between the Hotazel area and Coega in the Eastern Cape and the provision of the new bulk terminal at the Port of Ngqura.

South Africa accounts for close to 75% of global manganese reserves.

The project aims to retain the country’s position as the leading exporter of high-grade manganese ore.