HomeIndustrial MineralsKumba wants to operate Sishen-Saldanha line

Kumba wants to operate Sishen-Saldanha line

A view of the
861 km Sishen-
Saldanha ore line
Sishen South Mine, South Africa — MININGREVIEW.COM — 27 November 2009 – South Africa’s largest iron ore exporter – Kumba Iron Ore (Kumba) “’ would like to have a direct involvement in the operation of the Sishen-Saldanha ore line, according to its CEO Chris Griffith.

Interviewed during a site visit to Kumba’s Sishen South mine which is currently under construction, Griffith acknowledged to Miningmx.com that the issue was a sensitive one. “We do a lot of tap-dancing around it,” he said.

This is because although Transnet Freight Rail (TFR) maintains that it is running Sishen-Saldanha to international best practice, Griffith believes it could be better operated with private sector involvement.

Two of Kumba’s competitors – Rio Tinto and BHP Billiton – maintain they have a competitive advantage in the iron ore export business because they own and operate their own railway lines and port handling infrastructure in Western Australia. Griffith agreed with that assessment.

Transnet acting CEO Chris Wells has strongly defended TFR’s running of the Sishen-Saldanha line. He told Miningmx he was aware of the criticism, but said: “On any measure you care to apply, we are running the Sishen-Saldanha line as a world class operation.”

The eventual outcome of this debate could have major implications for the proposed increase of export capacity on the line beyond the current planned expansion to 60 Mtpa.

Transnet has just completed the Phase 1A expansion of capacity on the line to 41Mtpa, and is about to start the Phase 1B expansion to 47Mtpa. The parastatal said in its 2009 financial results that approval “in principle” had been obtained to go ahead with the R4.3 billion Phase 1C expansion to 60Mtpa.

The country’s two major iron ore exporters, Kumba and Assmang, previously indicated their desire to push exports well above the 60Mtpa level, and had been talking about going to 95Mtpa.