UK-based diversified miner Anglo American’s South African Kumba Iron Ore subsidiary is experiencing transport issues that have caused a 17% fall in profits over the past six months, Reuters reported.
Issues with securing reliable and consistent rail transport have seen growing stockpiling of iron ore at its projects. Kumba Iron Ore stated that it has 7.1 million tonnes (t) of iron ore stockpiled at its mines, an increase of almost 100,000t since December 2022.
Locust swarms, cable thefts and derailments, among other infrastructural issues, have forced Kumba and other mines to stockpile ore awaiting reliable transport. A Bank of America Securities analyst told Reuters: “Given complex and deep-rooted issues with South Africa’s rail network, we think that a more permanent solution could be unfruitful for some time yet.”
Kumba CEO Mpumi Zikalala stated her belief that partnership between the government and private actors can help resolve the crisis. “We have been collaborating with Transnet and we had some successes around tamping and locust spraying and a whole lot of other things,” Zikalala said. However, she added that the further problems of derailments and breakdowns must still be addressed.
Kumba is the top producer of iron ore in Africa, but state-owned rail operator Transnet has been beset with issues that have caused stockpiling at mines beyond just iron ore. Transnet’s 850km rail line transports several critical minerals to ports across the country. Platinum mining in South Africa, which Anglo American contributes to, has been beset by transport infrastructure issues that have led to a predicted undersupply for 2023.
In October, Transnet staff went on strike, forcing the company to declare force majeure on its transport links to the Kumba sites. Anglo American estimated that the 11-day strike alone impacted exports by around 120,000t per day. The subsequent stockpile cost the company $540m. Transnet is also the country’s port operator and manages all mining exports in the country.
