'White elephant' port favoured for manganese exports
South African government appears adamant that it wants the port of Ngqura to be the export point for manganese despite criticism from some quarters.
The state appears likely to make the port of Ngqura (Coega) the export locale for manganese, despite criticism that the move is motivated by a need to rescue the “white elephant”.
The decision appears to have been reached in spite of industry proposals to explore shipping the mineral through Saldanha Bay.
Two feasibility studies exploring both the Saldanha and Ngqura options, conducted in conjunction with the industry, have yet to be finalised. The first study by the industry exploring the Saldanha-route option has been completed but is being reviewed, according to an industry source. A second feasibility study into the extension of a manganese line to Ngqura is due to be completed only by the end of April.
But at the official opening of the Ngqura port last week, Public Enterprises Minister Malusi Gigaba told Mining Weekly the decision was “final”.
Chamber of Mines chief executive Bheki Sibiya has been among the most vocal critics of the choice to use Ngqura as a manganese export hub. The port was built on instruction, not on a commercial rationale, he told the Mail & Guardian in an interview last month. “Now it is a white elephant, which [must be] fed.”
Sibiya estimated that to move manganese from the Northern Cape to Ngqura would cost R1 000 a tonne, but shipping it through Saldanha would cost between R420 and R450 a tonne.
Transnet already transports the mineral to a manganese terminal in Port Elizabeth.
Transnet isn’t budging
The company staunchly defended its decision, which was based on three commercial considerations: infrastructure, capacity and environmental approvals.
Transnet also had to consider the country’s economic development objectives, including facilitating economic activity throughout the country, according to spokesperson Mboniso Sigonyela.
In terms of infrastructure, Ngqura was designed as a five-berth facility and already had the basic infrastructure, he said, “whereas at Saldanha, we would have to invest in building a new berth”.
In addition, Transnet would have to build a new line to Saldanha, whereas the Ngqura option would require only a 15km to 20km extension from the existing line to the Port Elizabeth Harbour.
The Saldanha option would also allow for only 12-million tonnes of manganese to be exported a year, but the port of Ngqura could accommodate at least 16-million tonnes, said Sigonyela.
Transnet is also expanding capacity for iron-ore exports from Saldanha. Obtaining environmental approval for a new commodity, in addition to those needed for expansion of the iron-ore line, “would be a challenge”, he said.
“Adding another commodity on the line would have a significant impact on the current operating model of the export iron-ore line as well as future capacity expansion on the channel,” said Sigonyela.
The costs quoted were “outrageous” and, if implemented, would make rail the most expensive mode of transport he said.
The company has identified Ngqura as a transhipment hub for the region, which will integrate the regional container system and capture a larger share of international container traffic. Transnet was investing significantly in infrastructure and equipment to increase container handling capacity to four berths from the current two.