Indaba shines spotlight on South Africa’s mining industry

The 2024 Investing in African Mining Indaba will place the spotlight on the significant potential of the mining sector in fostering economic expansion and employment opportunities, according to President Cyril Ramaphosa.

“This week’s Mining Indaba in Cape Town will showcase the enormous potential of the mining industry to drive economic growth and job creation,” Ramaphosa said on Monday in his weekly newsletter.

“The actions under way to improve the logistics system will help us unlock this potential, given that mining companies depend on the rail network and ports to compete in global markets.

“From the work already underway, we have shown that it is possible to overcome the barriers to growth by working together in partnership.

“We are building momentum and have begun to see the results.”

He emphasised that “as more and more of our products leave the country’s shores, whether to the African continent or other parts of the world”, more companies will thrive, more investment will be made, and more jobs will be created.

SA goods shipped from Durban

Ramaphosa’s comments follow last week’s launch of the first export shipment of goods produced by South African companies destined for other African countries under the preferential trade provisions of the African Continental Free Trade Area (AfCFTA) from the Durban port.

The AfCFTA intends to create a single market for goods and services, facilitated by the movement of people, to deepen the economic integration of the African continent.

The president, who officiated last week’s shipment of goods, said many more products and shipments can be expected to follow as South African companies sell South African-made goods into the massive African free trade area.

Exports to AfCFTA countries already account for nearly a quarter of South Africa’s global exports. The president added that this figure will now increase dramatically.
Said the president: “South African companies have a great opportunity to take advantage of the AfCFTA by exporting their goods to the rest of the African continent.

“In order to take this great opportunity up, as a country, we need to ensure that our products make it from the factory gate onto the ship and head towards their destinations with the least possible delay and at the lowest possible cost.”

Ports and rail

Turning to ports and rail, Ramaphosa highlighted that, for some years now, the efficiency and competitiveness of the South African ports and rail network have been in decline. He spoke of the need to fix the country’s logistics architecture.

Transnet, which operates ports and freight rail lines, has had to contend with severe challenges, including the effects of state capture, the impact of the Covid-19 pandemic, natural disasters, and the rising levels of theft and vandalism of its infrastructure.

As a result, the volume of goods transported on the rail network has decreased significantly, forcing more companies to use trucks and causing road congestion.

“Working together with the private sector, we are turning the situation around, guided by the Freight Logistics Roadmap that was crafted by Transnet, the government, and social partners.

“The roadmap outlines a clear set of actions to stabilise and improve Transnet’s performance in the short term and to fundamentally reform the logistics system in the long term,” he said.
The Presidency serves as the chair of the national logistics crisis committee, which brings together all relevant government departments to drive a coordinated response to the logistics challenges and ensure that this work receives dedicated attention.

Corridor Recovery Teams
The government has also established Corridor Recovery Teams, which bring Transnet, the private sector, and independent experts together to improve the performance of strategic rail and port corridors.
Ramaphosa said that this single-minded approach to improving performance is already showing results.

For example, the number of ships waiting to berth at the Port of Durban, which has experienced severe congestion in recent months, reduced from more than 60 ships in mid-November to just 12 ships at the end of January.
At the Port of Cape Town, which is preparing for the important fruit season, Transnet has deployed new leadership and is putting in place several measures to improve its capacity in the short term.

Seven new cranes, which are used for moving and stacking containers, were delivered to the port last month, and the number of work shifts is being increased to improve vessel turnaround times.
Mordernising logistics system

In addition to these short-term measures, the freight logistics roadmap includes far-reaching reforms to modernise the logistics system and enable much greater investment in infrastructure.

“These reforms will introduce private sector investment and competition in port and rail operations, improving efficiency and bringing down prices, while ensuring that infrastructure remains owned by the state.
“A key milestone in this reform journey will be the implementation of ‘open access’ to the freight rail network, which will allow private rail operators to invest alongside Transnet Freight Rail for the first time,” he said.
Another key step is the introduction of strategic partnerships in container terminals, which will enable new investment to expand port capacity and upgrade equipment.

Progress has already been made with the appointment by Transnet of an international container terminal operator for the Durban Pier 2 terminal.

Transnet will retain 51% ownership of the terminal, and no workers will lose their jobs once the partnership is established.

The private partner will have full management responsibility for the terminal and will contribute both capital and expertise to improve its performance.
“The process of reform takes time, and there are no quick solutions to the challenges facing Transnet,” the president said.

“However, the steps we are taking now will not only improve performance in the immediate term but will also create a truly competitive and efficient system into the future.” – 

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