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A Black Elephant Spewing Manganese

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As in every instance in life the above statement from Kalagadi Manganese Chairman Daphne Mashile-Nkosi will bring big smiles to some faces and groans of despair from others.

According to reports in the Business Day and Reuters; “South Africa’s state-owned freight company Transnet has signed a new deal with manganese miner South32 to export 2.6 million tonnes a year of the mineral to European and Chinese markets.”

Transnet will earn an estimated R10.4 billion from the seven-and-a-half year manganese export deal.

A total of 12.5 million tonnes of manganese will be transported every year once Transnet signs contracts with nine local manganese producers, including South32. Most of the mineral will be from the Northern Cape province and will be hauled on the Saldanha and Port Elizabeth ore railway lines.

Local Manganese Ore producer Kalagadi Manganese, under the chairmanship of Daphne Mashile-Nkosi is now gearing up to produce 2,4 million tonnes per year of sintered manganese for export. This is a new lease on life for the R9bn manganese mine that industry thought would never happen.

“This white elephant which is so famous in the Northern Cape will be a black elephant spewing manganese,” Mashile-Nkosi said, referring to the black colour of raw manganese.

In the past Kalagadi processed and sold 500,000 tonnes of manganese from on-reef development and purchases from third parties. It loaded the ore on open wagons and into containers to rail to Port Elizabeth as well as trucking it to the coast.

Kalagadi was keen to do business with its neighbour, South32, which had millions of tonnes of ultra-fine manganese stocked at its Blackrock mine and which would be a good feedstock for the sinter plant, Mashile-Nkosi said.

The R10.4billion deal will allow Transnet to invest in greater bulk-shipping capacity, specifically between Hotazel in the Northern Cape and Port Elizabeth, and the deep-water port at Coega in the Eastern Cape. As part of the deal, 15% of Transnet’s capacity would be allocated to new entrants to the manganese export market.

SA accounts for about 75% of the world’s manganese reserves and is the biggest supplier of chrome and manganese used in China’s stainless-steel production. Demand for manganese from China rose 39% in 2017, prompting South African producers to ship much of their ore by road at much greater cost than rail.

Transnet’s resulting investment would include upgrading railway-line ballast to handle the weight of manganese ore and adding second tracks to existing lines. It would also allow the development of facilities to handle open skip-containers and the construction of a new bulk terminal at the port of Ngqura.

EDITOR: The seven and a half year deal will take the companies up to 2025. The Port of Port Elizabeth has indicated that the last shipment of Manganese Ore from the Port will be in 2023. This leaves 2 and a half years on the seven and a half year deal – could this mean that the Manganese Ore exports will remain n Port Elizabeth until 2025 (or seven and a half years from date of signing) then in order to wring maximum return out of the deal?

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.