South African miners are largely maintaining export volumes of commodities including coal and iron ore despite a pricing bloodbath in those markets, according to the head of the state-owned freight-rail and ports operator.
Transnet SOC Ltd. expects to move about 75 million metric tons of export coal and 60 million tons of iron ore on its railways in its financial year through March 31, Acting Chief Executive Officer Siyabonga Gama said. That’s largely unchanged from 76.3 million tons and 59.7 million tons in fiscal 2015. Miners have indicated they’re concerned about losing market share if output slows, Gama said.
“There is a bloodbath in the commodities market, but the extent to which we have experienced it, it is much less than what we thought might actually happen,” Gama said in an interview last week at Bloomberg’s Johannesburg office. “When I talk to the customers, some of them feel very strongly that if they responded to the market they would be squeezed out completely.”
The company had budgeted for export coal volumes of 77 million tons and 62 million tons of iron ore in the current financial year, Gama told reporters in July.
Transnet is implementing a rolling seven-year, 336 billion-rand ($25 billion) plan to expand and upgrade rail and port capacity in South Africa, the world’s biggest manganese producer and the continent’s largest of iron ore and coal.
The project aims to reduce bottlenecks and shift freight from roads to rail in the country where Anglo American Plc, Glencore Plc and South32 Ltd. have operations. While the rail operator remains committed to completing its investment plans, some projects may take longer than previously expected because of the decline in commodity markets, Gama said.
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