South African mining industry is losing $44m in export revenue per day due to an ongoing strike at ports and freight-rail operator Transnet, the country’s industry body has said.
The Minerals Council South Africa, whose members account for more than 80% of Transnet’s rail business and 50% of the group’s income, said they were unable to rail and load 357,000 tonnes of iron ore, coal, chrome, ferrochrome and manganese onto ships daily, estimated to be worth 815m rands ($44m).
“We estimate that just 120,000 tonnes of minerals worth R261m ($14m) are being exported daily. Major mineral export harbours are operating at between 12% and 30% of their daily averages,” Minerals Council said on Thursday.
Workers at the state-owned logistics group rejected the latest revised pay offer of up to 5.3% and said they plan to intensify the strike that started last week.
South Africa’s government and leading exporters have warned of devasting economic effects if operations at the state-owned ports in Durban and Cape Town are suspended for an extended period of time, calling for an urgent resolution of the wage dispute.
“Government is extremely concerned about the negative impact on the South African economy, particularly, those sectors that are dependent on Transnet for their logistical services. We need to remind all that if we are able to, as soon as possible, resume exports of agricultural products, mineral resources and other manufactured products, we will be contributing to sustaining hundreds of thousands of jobs across the economy,” the country’s ministers Pravin Gordhan, Thulas Nxesi and Thoko Didiza said in a joint statement on Thursday.
“The damage caused by the strike is not just the immediate impact but the longer-term consequences of having to catch up on delayed exports and imports, which will have a ripple effect on business and broader society,” the industry body warned.
The Transnet rails and ports have been operating below capacity for some time, costing the mining industry about $2.7bn in lost opportunities in 2022 alone, according to the Minerals Council.
On average, South Africa exports about 476,000 tonnes of bulk minerals a day, worth around $58m.