FREIGHT & TRADING WEEKLYJANUARY 2012

blessing or curse?

How rail is becoming more mineral friendly

Africa’s natural resources –

Exporting r500 Million a yEarPieter van den Berg on the secrets of Weir Minerals’ success

MINING & MINERALS

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January 2012 Mining & Minerals 1

CONTENTS www.ftwonline.co.za

Editor Joy Orlek

Consulting Editor Alan Peat

Assistant Editor Liesl Venter

Advertising Carmel Levinrad (Manager)

Yolande Langenhoven

Gwen Spangenberg

Jodi Haigh

Division Head Anton Marsh

Managing Editor David Marsh

CorrespondentsPort Elizabeth Ed Richardson

Tel: (041) 582 3750

Swaziland James Hall

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Co-ordinators Tracie Barnett, Paula Snell

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Pieter van den Berg, Weir Minerals – Page 2Photo: Shannon Hill; Cover Design: Dirk Voorneveld

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Shipper profile

A footprint in the region is key says R500-m-a-year exporter ...........2

Big issue

Digging for clues on the future of mining in Africa – shrugging off the ‘natural resource curse’ ................................................................. 4

Logistics

Rail sites move closer to the mines .....................................................6TFR moves major volumes on Maputo line .......................................6Logistics costs and customs delays continue to challenge transporters .........................................................................8Logistics critical to mining industry success ....................................10Public private partnerships key to rail expansion plans ....................12Clear signs of expansion in Namibia ................................................14SA-Swazi rail line on the cards .........................................................12Volumes remain volatile ...................................................................18Mining industry keeps rail on track ..................................................20Bulk bags help reduce logistics costs ...............................................20Big expansion plans for RB coal line ...............................................22Recovery in minerals market helps grow volumes ...........................24Crossroads lands fuel contract ..........................................................26Mining industry benefits from improved rail efficiency ...................26Logistics realigned to accommodate oil and gas activities ...............28

Airfreight

New Airlink freighter poised to serve mining industry ................... 20

Seafreight

Heavy-lift fleet offers extensive service network ..............................3Maputo notches up productivity records ..........................................10Dedicated commodity desk co-ordinates pricing ..............................16

General News

Flat pack containers offer versatile accommodation.........................16Inspections company signs deal with Chinese major .......................18Mozambican coal mines trigger agricultural growth ........................22Regional gateway status offers big benefits ......................................24SA-China mining partnerships ‘critical’ ...........................................26

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2 Mining & Minerals January 2012

SHIPPER PROFILE www.ftwonline.co.za

By Liesl Venter

No-one appears to have told Weir Minerals about the world’s economic woes.

In fact, they are so hard at work doing what they do, they probably would not find the time to listen anyway.

Specialists in delivering and supporting slurry equipment solutions – including pumps, hydrocyclones, valves, vibrating screens, mill lining systems, hoses and rubber wear-resistant linings for global mining and mineral processing to the power sector and general industry – they have been on an upward curve of note in the past few years. This commitment to growth saw the company being awarded the Gauteng Exporter of the Year in 2011.

At the glitzy function in Auckland Park in Johannesburg it was overheard that the company had impressed judges not only with its operational efficiency and outstanding work ethic, but also the balance sheet that has continued to show positive increases despite the global meltdown.

The Weir Minerals team is too modest to comment when

asked about this, only saying that its investment in research and development, its people and its operations in general has paid off.

“We have seen our volumes double in the past three years because we have spent money in the right places. In other words our lead times have improved, we offer a good quality product at the right price, and we have the ability to back it all up with parts and service. That is what has made the difference”, says CEO Dave Athey.”

Exporting across the world, the company manufactures some 160 000 parts per month, as well as 400 complete pumps.

“Our facility in Isando is our primary supplier. Goods then move to our warehouse in Alrode from where we despatch and distribute,” says Athey. “We have a very efficient system in place that allows us to move our product quickly. Much thought went into this part of the process to ensure that an efficient system is in place.”

According to export manager, Pieter van den Berg, the value of their exports is between R400 and R500 million

per year.“Our biggest export market

is Africa, although we export across the world to nearly every region,” he told FTW.

With the profile of the business having changed quite extensively over the past few years due to the company’s acquisition of the CH Warman group in 2008, as well as of Linatex in 2009, they have significantly extended their export market into Africa.

“The continent comes with its own fair share of challenges,”

says Van den Berg. “The key driver of success is to have a footprint in the region to which you are exporting, an understanding of the local conditions and the right expertise to deal with any issues that arise. For that reason we have operations in Ghana to service West Africa, in Zambia primarily for the Copperbelt and the DRC, in Mwanza in Tanzania as well as two branches in Namibia, one in Bulawayo in Zimbabwe and one in Francistown in Botswana.”

A footprint in the region is key says R500m-a-year exporter

By Liesl Venter

Exporting to Africa is more difficult than anywhere else in the world, says Weir Minerals export manager, Pieter van den Berg. “The lack of infrastructure, different legal systems and legislation, bureaucracy and the associated red tape, corruption and political instability at times, all play a major role.

“In the mining industry it is even more prevalent as we are shipping to very remote mines. Having the ability to deliver to a client can be very trying, but that

is where the difference between success and failure lies.”

Gavin Dyer, the company’s sales and marketing director: Africa, says to address these issues they have extended their African footprint significantly. “We also make sure that we hire locally as that is where the expertise lies. We have very few expats working in our African offices and they are the exception rather than the rule.”

With many of its export processes dictated by its clients, the company has taken the step of establishing an in-house freight

forwarding company.“It has made a major difference

in some instances to lead times,” says Van den Berg. “One must remember that often the big mines have contracts in place with specific companies to move their cargo and we slot in with that. Otherwise we use our in-house company.”

He said their average lead time to Kitwe in Zambia used to be around 14 to 17 days, but that has been improved to between six and seven days using their own company.

“For us it is all about lead

times. We use the most direct route possible. Shipping lines are chosen on how direct their sailing route is. It is about getting our product to the client as quickly as possible.”

Airfreight is only an option in the case of emergencies, says Van den Berg. “It is just too expensive otherwise, given that our products are big, bulky and heavy.”

For the future they are extremely upbeat. “The great thing about the mining industry is that when one commodity is doing poorly there is always another one doing well,” said Athey.

‘It’s all about lead times’

Pieter van den Berg ... ‘Our biggest export market is Africa, although we export across the world to nearly every region.’ Photo: Shannon Hill

January 2012 Mining & Minerals 3FTW4623

When the mining industry talks about moving capital equipment either locally

or internationally, it often refers to cargo of gigantic proportions.

This, in turn, needs moving equipment of equally massive size.

One of the service providers for such big moves is the German heavy-lift operator, BBC Chartering.

With currently more than 140 vessels being marketed, the company operates the single largest multipurpose and heavy-lift fleet in the market – with lifting capacities reaching up to 800 tonnes and vessel sizes that range from 3 500t to 37 300t deadweight.

With this fleet, BBC Chartering offers an extensive network of liner services around the world,

and a network of 25 sales and chartering offices with 300 employees assist clients around the world in planning and executing their transport assignments.

It serves the mining, oil and gas, power and utility, offshore contracting, chemical processing, and mechanical engineering industries – offering tramp, affreightment and liner services.

A recent highlight was when BBC Chartering secured the contract to transport radio telescope antennas for what is currently the largest cosmic project on earth, the Alma observatory located in the Chilean Andes.

For this project 25 antennas were ordered from the European AEM consortium, and required maritime transportation from Aviles in Spain to Antofagasta in

Chile. Also, another portion of 12 antennas needed to be shipped from Kobe Japan to Mejilones Chile.

The availability of vessels with their own lifting gear, and the flexibility to load in Aviles on the regular European service to the

West Coast of Latin America, were major arguments favouring the company’s choice.

The first antenna was shipped early 2009, and 16 antennas have now been delivered to Chile. Three more were loaded onboard the BBC Colorado in mid-December.

Heavy-lift fleet offers extensive service network

BBC Arizona loading radio telescopes for the Alma observatory in the Chilean Andes.

4 Mining & Minerals January 2012

www.ftwonline.co.za

By Ed Richardson

Africa has yet to shrug off its pre-colonial status as a supplier of raw materials

and market for finished goods.The problem even has a name

– the “natural resource curse”. The 2011 International

Monetary Fund (IMF) Regional Economic Outlook for Sub-Saharan Africa warns: “Because the region’s trade relationship with larger emerging partners is overwhelmingly concentrated on exports of raw commodities, inadequate management of natural resource wealth could lead to many of the economic problems commonly associated with natural resource dependence.

“Sub-Saharan countries have experienced these problems for decades: crowding out of higher-value-added activities, procyclical macroeconomic policy, an unsustainably rapid depletion of resources, and high volatility in terms of trade,” it adds.

The freight industry is only too aware of the impact of these factors.

When commodity prices are high, the logistics chain creaks under the strain, and import volumes rocket to meet the demands of the mines and the cash-flush consumers.

Most countries in the SADC region import huge volumes of consumer goods, clothes and even food when the times are good.

African governments wanting to encourage local value-adding and manufacturing find the rest of the world does not necessarily play fair.

According to the IMF, many of the countries importing raw materials from Africa

have trade barriers in place that deter “export growth and sophistication in sub-Saharan Africa.

“The objective should be to reduce overall protection in emerging partners, minimise tariff escalation, and broaden duty-free access beyond low-value and lightly processed

African goods,” it says.Africa’s bargaining chip is its

mineral wealth. Countries like Zambia and South Africa are starting to leverage that strength by insisting on the adding of value to mineral exports.

Until emerging world markets are opened up to Africa and internal trade within

the continent is restored, the economies of most countries will be held hostage by the inevitable commodity boom and bust cycles.

There are as many opinions on the direction the world economy is taking – and hence the demand for commodities – as there are economists.

The African freight industry will have to continue doing what it is best at – adapting to the ever-shifting dynamics of the minerals business.

What not too many companies in the logistics chain are good at, however, is identifying opportunities outside of their comfort zones. Agricultural commodities are fast emerging as a significant contributor to freight volumes, and could well equal mining exports in value in time.

Diversification is important because one of the threats facing the existing companies along the value chain is the growing presence of Chinese miners on the continent. Chinese

companies are seen to tend to use Chinese service providers wherever possible, and establish new logistics chains to serve their needs – a practice that excludes established businesses in the area.

“China has continued to gain strong influence in the global mining sector against a background of increasing activity in the acquisition of overseas resources,” Jeremy South, global mining leader at Deloitte Touche Tohmatsu (DTT) told a conference.

He predicted that Chinese mining companies would continue to invest in and explore more mines on the African continent.

European, South American, Canadian, American and South African companies are, however, starting to oppose the Chinese takeover of Africa’s mineral wealth.

Life as an African logistics company, as the Chinese saying puts it, is going to be “interesting”.

Digging for clues on the future of mining in AfricaAfrica needs to shrug off the ‘natural resource curse’

Africa has yet to shrug off its pre-colonial status as a supplier of raw materials and market for finished goods.

‘African governments wanting to encourage local value-adding and manufacturing find the rest of the world does not necessarily play fair.’

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6 Mining & Minerals January 2012

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By Joy Orlek

In a move to facilitate the growth of mineral exports in containers, Transnet Freight

Rail’s Container and Automotive Business (CAB) unit has identified bulk containerised sites as a sustainable value proposition for its customers.

“We rail products from Bloemfontein and Polokwane, and believe that by rolling out more of these sites where product is containerised closer to the mines, we will facilitate growth,” CAB general manager Themba Gwala told FTW.

The bulk of minerals originate from the City Deep and Pretcon terminals, he said. “And we are currently working on some exciting projects that will lend themselves to loading heavy mineral mining products from source – in the North West, Limpopo, Northern Kwazulu Natal, Northern Cape and the North Eastern Cape areas.”

TFR is working closely with the provincial governments and municipalities in these areas to identify opportunities that will add value to the communities with a strong focus on job creation and development in the

rural areas of the country, he said.

Carrying heavy minerals has however demanded some modification of equipment.

“The older, traditional wagons could only handle a gross mass of 48 tons and we had to centre mount thus not optimising wagon capacity,” Gwala explained.

“We have invested several million rand in upgrading more than 2 500 older, traditional container wagons to become ‘extra heavy’ wagons with a higher payload capacity, carrying a maximum of 60 tons.”

In addition, by introducing the 75-wagon trains (famously known as the Anaconda) to meet with the growing vessel sizes, TFR is able to move larger parcel sizes timeously to the ports and improve operational efficiency, capacity utilisation and resource

optimisation, he pointed out.“It is also more convenient for

our ports to receive containers in block trains by rail in order to de-bottleneck access to them.”

Traffic congestion and inadequate access roads to the ports is a challenge facing municipalities and with the forecast growth in container volumes into the future, this situation will not improve immediately, in TFR’s view.

And solid statistical evidence underscores this view.

“South Africa is one of the largest producers of mineral mining resources in the world, contributing around 9% to its gross domestic product (GDP) while the country’s mineral industry constitutes approximately 47% of the total export market .

“With containers dominating the market in recent years, and the growing environmental awareness spurring growth, over the past two years TFR’s CAB unit has grown by approximately 170% in the transportation of containerised minerals by rail,” Gwala told FTW.

The Natcor (Natal Corridor) handles approximately 65% of all rail volumes with minerals

being the primary export product.

“New markets are being investigated as demand increases and we have rolled out an exciting containerised manganese project from Bloemfontein to the port of Ngqura,” said Gwala. “This modal shift not only generates savings for our customers, but from a macro-economic perspective, it reduces the density of trucks on our national roads.”

Rail sites move closer to the minesBulk containerised facilities offer value proposition

Themba Gwala ... ‘Over the past two years TFR’s CAB unit has grown by approximately 170% in the transportation of containerised minerals by rail.’

By Liesl Venter

In the first half of this financial year Transnet Freight Rail moved 1.6 million tons of coal on its Maputo line.

According to Siyabonga Gama, chief executive of TFR, this is equivalent to the tonnage moved in the whole of the last financial year.

“In other words we intend to improve coal exports to

Maputo by 200% in the present financial year,” he said. “We have also moved 727 000 tons of magnetite this year. This is more than what we moved for the whole of the financial year. We intend to double our railing of magnetite this current financial year.”

Gama said it was a fallacy that TFR had constrained growth in volumes exported from the TCM terminal.

“In 2011 coal exports to Maputo came to a halt due to a major equipment breakdown at the coal terminal. We had delivered so much coal to the TCM port that the terminal capacity for stockpiles had been exhausted and we could not rail any more until the stockpiles had been cleared.”

He said during 2011 there were numerous occasions where the terminal had not been

able to cope with the level of railings to the port so anyone claiming that TFR was not supportive of the Maputo Port was incorrect.

“We have increased our trains per week from 18 to 25 and we have also increased our train size from 20 wagons per train to between 40 and 50 wagons per train. We therefore do more tons per train with a lot more trains.”

TFR moves major coal volumes on Maputo line

‘More than 2500 older traditional container wagons upgraded to become ‘extra heavy’ wagons with a higher payload capacity.’

January 2012 Mining & Minerals 7FTW5413

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8 Mining & Minerals January 2012

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FTW: What is the biggest challenge facing transporters of commodities in southern Africa?Frank Gschwender, Transworld Cargo: There are a multitude of challenges. These include “hard factors” such as huge distances between distribution points, low population densities, quality/lack of infrastructure, as well as “soft factors” such as safety and security, lack of skills and work ethics, and inefficient regulatory and policy environment.

It is difficult to single out the most critical factor, the one that alone would trigger major improvements of a supply chain operation. After all, the efficiency of a supply chain is determined by the seamless integration of all of its critical links and, bottom line, the resulting transport costs. In our view it is the transport costs in southern Africa that constitute the biggest challenge.Warren Jayes, Leo Shipping: The biggest challenge is reducing slow turnaround of trucks due to standing time at the borders going both north and south, especially the current problems with the Zimbabwe side of Beitbridge, which is now on an EDI system with which many agents are struggling.

The second concern is security of trucks importing goods into South Africa. These are prone to regular hijackings and the agents are held responsible for VAT and duties as Sars deems these hijacked goods to be sold on the local market.Mahaveer Chavda, Chavda Freight: The biggest issue is Customs at the borders as this causes major delays and we end up incurring unnecessary costs.

FTW: What is the impact of these challenges?

Gschwender: Transport costs in southern Africa compare very unfavourably with those of other (sub) regions of the world. Numerous international benchmarking reports such as the most recent Doing Business Report 2012 of The World Bank continuously suggest that many southern African countries don’t feature too badly in overall business competitiveness.

However, more often than not, the same countries feature badly in logistics and trade systems. Namibia is an example: Out of 183 countries, it ranks 78 in overall “ease of doing business” but it ranks in position 142 in terms of “trade across border”. No need to say that neighbouring countries do not perform better. The bill of corresponding transport costs is footed by the consumer at the end of the day, and affects the competitiveness of the national economy.

Jayes: It is all about high cost and low returns for transporters. Slow clearances at borders result in fewer round trips which means less income.

Chavda: When Customs decides to stop a shipment for no reason at all or undertake unnecessary procedures which delay our trucks at the borders, we then have to explain this to our clients, which paints a bad picture of roadfreight to them. Because of this a lot of companies will switch to other modes of transport.

FTW: What is the solution to overcome the challenges you have mentioned?

Gschwender: There are some factors that are difficult to

change – distance, infrastructure, balance of trade etc. However, there are those that provide some level of leverage. Some of them are in the private sector domain – overloading and participating in corrupt practices for example.

Others are in the public sector domain – customs simplification and harmonisation, risk management systems, electronic data interchange, capacity and skills development to mention a few. The term “time is money” has definitely not been invented in southern Africa where one can wait for days and days for customs releases at inland border posts and off-loading sites.

Namibia benchmarks its path to industrialisation against countries such as Malaysia, Finland or Canada. Time and cost for import/export operations are 300% higher than in Finland, or 170% (time) and 400% (costs) than in Malaysia. But there is also good news – Namibia improved is position by 11 rankings from 2011-2012. The longest journey starts with the first step.

Jayes: The answer lies in solid planning and good understanding of customs requirements on both sides of the border and doing one’s best to ensure that full requirements

are in place prior to loading. With regard to hijackings, the only solution is for an escorted convoy of trucks to try to reduce the risks. However this does have a direct effect on running costs. Sars and the police should be ensuring that cargo can transit our country safely, especially on heavily tolled roads.

Chavda: We overcome the challenges by having our shipping documents pre-cleared at the border before trucks even arrive there. This way if there is an issue with Customs we can have it sorted out, which will save us time and money.

Logistics costs and customs delays continue to challenge transportersCompanies active in southern Africa share their views on the challenges of transporting commodities across the continent.

Biggest challenge is reducing slow turnaround of trucks due to standing time at the borders

Warren Jayes ... ‘Slow clearances at borders result in fewer round trips which means less income.’ Photo: Shannon Hill

January 2012 Mining & Minerals 9

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10 Mining & Minerals January 2012

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By Ed Richardson

A number of new productivity records have been set in the port

of Maputo over the past few months, according to Soraia Abdula, communications and CSR officer.

On November 15 and 16, a Maputo port team using grabs loaded chrome ore concentrate at a rate of 404.3 gross tons per hour GTPH onto the M/V Zhon Shaw Hai.

“In the region the average numbers are about 120 tons/hour,” says Abdula.

“The fact that it was a single hatch (only one group) contributed to the record, but we cannot overlook the organisation and high motivation of the team involved,” she says.

On November 26, the port set an internal record for the

unloading of ferrochrome wagons. A total of 60 wagons was unloaded in a 12-hour shift, compared to the average of 30 wagons per shift over the past two years.

Higher productivity was achieved through the deployment of new and refurbished equipment, as well as new work schemes, she says.

The best part of these two records is that they were set “with zero harm.

“In fact in the whole month of October there was not one single incident in our operations or in the port, and in our last safety audit in November, performed by Grindrod, we achieved an impressive 92% of compliance;” she said.

The Maputo Port Development Company (MPDC) is currently implementing its Port Master Plan, which was presented to the

public of Maputo during June 2011.

The Port Master Plan outlines an investment plan of around a billion dollars to upgrade and develop port infrastructure, and

specifically the expansion of the coal, container and car terminals.

The first major capital project, the dredging of the port’s access channel, was completed in January this year, she said.

The team that set a new record of 404.3 GTPH for the loading of concentrated chrome ore in Maputo.

Maputo notches up productivity records

By Liesl Venter

Mining is a key instrument that will drive development of various sectors in Africa making the supply chain and logistics industry critical in ensuring that this industry succeeds in its mandate.

According to Ivan Thuynsma, general manager mining vertical – UTi Africa, it is with this in mind that the company has developed end-to-end solutions that assist clients in the mining industry to effectively deliver on their mandate of creating sustainable development in the region. “Flexibility and collaboration among different stakeholders may be the key to success for supply chain providers.”

He says there is no doubt that mining will not only be one of the most profitable industries in the region but also the continent – with the DRC and Zambia leading the way.

“Low integration into the global trade markets in 2009 shielded the region against the downturn. Going forward, the alliance with BRICS will

reinforce South Africa’s position as a gateway into Africa which may provide a buffer against economic eventuality,” said Thuynsma. “However, supply chains should provide the industry with forecasting and optimisation capabilities that will guide businesses in making the right decisions in line with their business strategies.

“We have developed a team that is dedicated to mining operations and, owing to the company’s partnerships with mining houses, we can assist mines wherever they are located. This team is responsible for designing and implementing practical supply chain solutions for mines, especially those in remote areas,” said Thuynsma.

Cost and infrastructure,

however, still remain two of the main challenges in the mining industry in Africa.

“Supply chains are synonymous with costs. Many companies still focus purely on logistics spend, which is a short-term strategy,” said Thuynsma. “To deliver long-term value and increased bottom line results, companies should rather focus on total supply chain costs.

“Consideration also needs to be given to requirements such as sustainability, continuity and visibility. It is important to configure the solution to achieve the right supply chain outcomes. This, in turn, drives other key areas, such as stockholding and replenishment decisions, which can quickly drive down costs and free up working capital.”

Logistics critical to mining industry success

‘Specialist team in place for designing and implementing practical supply chain solutions for mines, especially those in remote areas.’

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By Liesl Venter

Transnet Freight Rail will require in excess of R300 billion to sustain and

expand its business over the next ten years if it is to meet the aggressive growth targets set for it by government.

According to Siyabonga Gama, chief executive of Transnet Freight Rail, TFR recognises the fundamental role it plays in the economy and that an efficient, well-funded railway is a key ingredient in the recipe for South Africa’s success.

“The quantum of funds required will necessitate innovative partnerships between the public and private sectors to ensure sustainability of the rail sector in South Africa.”

Gama says the expansion of port terminals owned by Transnet is planned to coincide with rail infrastructure expansion to avoid creating stranded, unproductive assets.

“Making new capacity available to customers is considered in a corridor context and will therefore be based on a commercially viable and integrated ramp-up schedule.”

Having embarked on a number of initiatives to ramp up volumes, key focus areas continue to be coal and magnetite.

According to Gama, with regard to coal, an increase in tonnage from three million to ten million tons is expected in the next seven years, while magnetite will see volumes increase from 1.2 to 3 million tons.

“The iron ore in September set a new weekly throughput record of 1 146 900 tons. This compared to the previous record of 1 094 400 tons. The coal line did not disappoint either and recorded a milestone of 1.62 million tons in the same period. This remarkable performance topped the 2006 record of 1.57 million tons,”

said Gama.He said the ramp-up of TFR’s

coal lines would see some substantial investments made to sustain and grow their business. “The ramp-up is a combination of capital investment in infrastructure and rolling stock.”

According to Gama, an operational efficiency programme based on identified efficiency levers is starting to deliver the desired results and the improved operational performance is also integral to establishing the tempo required for their ramp-up.

“The Waterberg represents the next coal basin in South Africa with vast coal reserves and contains more than 40% of remaining coal reserves in South Africa,” said Gama. “Coal from this area will predominantly be for Eskom and select export markets. TFR is currently conducting feasibility studies to verify demand levels from existing and new players,

many of which are junior, BEE miners.”

He said TFR was increasing capacity in this area by creating loops in Matlabos and additional capacity would be available as early as 2013. Plans could include the development of a new line from north of Thabazimbi to Ermelo in later years, he said.

Public private partnerships key to rail expansion plansCoal to increase from 3m-10m tons in seven years

By Liesl Venter

A feasibility study into a railway line connecting South Africa and Swaziland is due for completion in January this year.

According to Siyabonga Gama, chief executive of Transnet Freight Rail, the study will help define the technical requirements for the legacy connection of the TFR network at Lothair to a defined point on the Swaziland network.

“Preliminary results of this study have been very promising and it is anticipated

that this link line will not only provide alternative routes for general freight that is coal, chrome, ferrochrome and granite to the ports of Richards Bay and Maputo,

but the re-routing of general freight traffic over this line is expected to alleviate the

pressure on the coal line south of Ermelo.”

According to Gama, this will enable Transnet to commit to levels beyond 81Mtpa sooner.

He said funding of this investment was likely to be a public private partnership.

In the meantime the manganese line is also getting some attention with port capacity currently limited to 4.8Mtpa with a further increase to 5.5Mtpa in 2012 and 2013 expected.

“The limitations are mainly due to port terminal constraints owing to limitations dictated by available space and the

number of grades that have to be handled in the port,” said Gama. “Transnet has made public its intent to relocate the terminal from Port Elizabeth to Ngqura with an expanded footprint to handle in excess of 16Mtpa. The rail corridor, which has capacity of seven million tons for manganese, will be upgraded to accommodate the running of heavy haul manganese trains.”

He said a scalable, integrated rail and port expansion programme was being developed with the costs set to be carried by Transnet alone.

SA-Swazi rail line on the cards

‘The manganese line is also getting some attention with port capacity to increase to 5.5Mtpa in 2012 and 2013.’

Siyabonga Gama … ‘The quantum of funds required will necessitate innovative partnerships.’

January 2012 Mining & Minerals 13

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14 Mining & Minerals January 2012

Representing possibly the most interesting upstream project in Namibia is a R12-billion investment and 4 000 ha “Vision Industrial Park” (VIP) on the country’s west coast, says Transworld’s Frank Gschwender.

“It’s a chemical plant, combined with a deep sea port and bulk handling facility with additional energy, water and transport infrastructure,” he told FTW. VIP will produce reagents such as sulphuric acid.

“The VIP will not only be a massive investment and production plant, but will also boost the competitiveness of the Namibian uranium sector. For the developers, Gecko Namibia,

the VIP will be nothing less than the first step in the process of transforming Namibia into an industrialised nation. 2012 will be critical in the decision-making process on whether or not this vision becomes reality,” said Gschwender.

He believes the challenge for the logistics industry in Namibia is to keep track of sector developments and to scale up service capacities. “The challenge is to be able to service the wide range of XXL mining logistics projects,” he said. “Currently Transworld Cargo is serving mining operations both in Namibia and the region. It benefits from the strategic infrastructure of the Atlantic sea port in Walvis Bay,

the Trans Kalahari Corridor into Botswana, and the Trans Caprivi Corridor into the copperbelt of Zambia and DRC. We are, however, gearing up for future opportunities.”

This includes expanding and upgrading its facilities at strategic locations.

“As the expected developments in the mining sector will easily surpass Namibian local capacities, we will strategically partner with international players, thus combining international resources with local expertise. An example is the partnering in a global network of heavy lift transporters to cater for oversized project cargo,” said Gschwender.

www.ftwonline.co.za

By Liesl Venter

The Namibian mining sector has recovered well from the 2008/2009 economic downturn

– when it suffered an incredible 45% contraction – reaching in most areas pre-recession performance levels, said Frank Gschwender of Transworld Cargo.

Based in Windhoek in Namibia, Gschwender says that in terms of production volumes, contribution to GDP and employment, mining in the country is doing well.

“2010 was the third consecutive

year that non-diamond mining contributed more value added than diamond mining, a clear sign of expansion and diversification of the sector within the national economy,” he told FTW.

Namibia is said to be rich in poor mineral deposits but poor in rich deposits which creates its own challenges both for mining operations and service operations. It is a world-class producer of rough diamonds, uranium oxide, zinc and fluor spar, besides others such as such as gold, blister copper and lead concentrate.

According to Gschwender, a highlight in 2011 was Africa’s most sophisticated cement plant by Schwenk-owned Ohorongo Cement being inaugurated and starting production. “The plant is designed to produce 700 000 tons of cement per annum for domestic consumption and for export. Also, the uranium sector made significant progress through the expansion of existing and preparation of future operations.”

Namibia is the world’s fourth-largest uranium-producing country after Kazakhstan, Canada and

Australia. This position will be boosted when, in addition to the current Roessing and Langer Heinrich mine, the AREVA Trekkopie mine and Extract Resources Husab mine come on stream with production from 2013 and 2015 respectively.

“There are some very interesting projects and developments in the pipeline,” said Gschwender. “The increasing global demand for minerals supports extensive exploration activities in the copper, gold, base-metals and other mineral sectors.”

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16 Mining & Minerals January 2012

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Given the volatility of the commodities market over the past few years, finding

the right pricing is key to growing volumes, says Safmarine South Africa’s sales and commodity manager Steve Simpson. ”And that doesn’t imply quoting the lowest rate or fixing long terms. Instead, the answer lies in offering commodity exporters a unique pricing policy and being flexible on pricing matters.”

With South African mines the largest suppliers of chrome and mineral ores to the Chinese market, it comes as no surprise that commodity exports account for the largest portion of South Africa’s dry exports, says Simpson.

“The Far East is a critical market for South African mineral exporters and Safmarine has worked hard to establish itself in this market and become one of the core carriers of South African minerals,” he told FTW.

Experience has shown that mutually beneficial growth is best achieved via a partnership approach, in his view. “This

approach, together with a focus on strategic areas, has allowed us to grow business very successfully for one of our customers who previously shipped with a competitor line.”

Simpson, who joined Safmarine seven years ago, heads Safmarine’s national commodity pricing desk based in Johannesburg.

“By establishing a dedicated commodity desk to co-ordinate all commodity pricing nationally, we have ensured that Safmarine is at all times aware of opportunities, challenges and risks in this market.”

He believes the A P Moller-Maersk Group, of which Safmarine is a member, offers a superior product in terms of capacity and port coverage from southern Africa to the Far East.

The line offers two weekly services ex South Africa (ASAS and Safari) and services from Maputo and Namibia. The African commodity market is still a largely 20ft market, according to Simpson.

“This causes imbalances in

certain countries and equipment challenges in South Africa where 20-footers remain a requirement for the majority of the commodity exporters.

“But we are looking at ways to incentivise the use of 40-footers in order to balance the trade,” he says.

Steven Simpson … ‘Mutually beneficial growth is best achieved via a partnership approach.’

Dedicated commodity desk co-ordinates pricing

By Liesl Venter

The mining industry continues to play a major role in the South African economy, offering plenty of opportunity to companies willing to take on the challenges associated with it, says Warren Jacobs, sales manager for Almar Container Group.

“One of the biggest challenges across the African continent remains the lack of infrastructure,” he told FTW. “Ever-growing logistical demands will have to be met with investment by the African mining industry to overcome the lack of infrastructure – and if this can be achieved it will create an attractive environment

for foreign investment.”According to Jacobs,

continuous investment in the mining industry bodes well for the South African economy, especially after the knock it took due to the global economic recession and the 2008 power outages.

“The economy, in which mining plays a major role, cannot develop without adequate and reliable energy resources. It could be argued that the 2008 power outages may potentially have had a more detrimental effect on the local economy than the global economic crisis did,” he says.

Almar Container Group, a container leasing and trading company with offices in Dubai,

Brazil, India and a head office in South Africa, believes there are some very exciting mining opportunities in both South Africa and our neighbouring countries.

He says the mine site container requirements are vast and varied and Almar has grown its product offering to meet these requirements.

“Apart from the standard site office, storage requirements and project cargo containers, we have also catered for on-site static cold storage where full service maintenance contracts are offered,” he says.

The company has also developed a modular accommodation offering through its flat pack containers.

These versatile containers provide solutions covering offices, accommodation, dining facilities, and ablutions all suitable for remote site requirements.

Flat pack containers offer versatile accommodation

Modular accommodation offered through flat pack containers.

By Ed Richardson

African governments are starting to take a bigger slice of the revenues generated by the mineral resources in their countries.

The money is needed to combat poverty, which remains endemic in most resources-rich African countries, and also to build the infrastructure needed to support mining, agriculture and transport.

Countries that have increased tax rates or passed laws to increase government’s share of mining – or are in the process of doing so – include Tanzania, Botswana, South Africa, Mozambique, Zambia, Namibia, Zimbabwe, Ghana, Guinea, Liberia and Niger.

This is in contrast to the widespread concessions given as an incentive to companies to invest.

Some governments have also accused mining companies of hiding profits in order to avoid paying taxes.

Analysts warn that mining companies will come under increasing pressure to show tangible benefits in their host countries.

Mining taxes hiked to help alleviate poverty

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18 Mining & Minerals January 2012

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The outlook for the mining industry is extremely positive for 2012 despite

persistent global economic woes.

And this is particularly true of Mozambique, Angola and Guinea, according to Mahaveer Chavda, CEO of Chavda Freight.

While recession inevitably limits the world’s purchasing power and creates a more conservative climate, resulting in dwindling volumes and revenue, Chavda Freight managed to weather the previous recession and is well geared for the future, he told FTW.

“Volumes tend to still be quite volatile with high fluctuations from month to month,” Chavda told FTW. “This because it often

takes a month or two for quotes to be approved.”

But he remains optimistic. “We see significant opportunity in the mining and minerals sector. And thanks to a logistics services tender awarded by a large listed mining group, we have opened a new Chavda Freight division in Cape Town.”

With a policy of avoiding subcontractors, the company is in the process of increasing its fleet and purchasing more trucks.

“Legislation, policies and procedures imposed by certain countries continue to pose a challenge to those doing business in this industry as they result in red tape which makes it unfeasible to do business in

these countries. The likes of the DRC for example have proved to be quite impermeable,” he said.

Volumes remain volatile – and outlook positive

Mahaveer Chavda ... ‘geared for future growth.’

By Liesl Venter

South Africa’s Global Inspections Group (GIG) has concluded an agreement with one of the biggest Chinese certification and inspection companies.

According to Stefan Sakoschek, GIG chairman and CEO of the Global Inspections Group, the agreement will see GIG acting as one of the agents of the parastatal Chinese Certification and Inspection Company (CCIC) locally, while they will act as agents for GIG in the East.

“It increases their foothold in southern Africa, allowing them to do mineral inspections locally and ensuring a faster turnaround time,” he said. “We are very excited about this venture because not

only does it mean there is an additional inspections company to choose from but one that directly represents the Chinese in southern Africa.”

He said the benefits extended to both GIG and CCIC. “Any product en route to China has to be inspected and the Chinese prefer their own people to do the work. It has been one of the biggest stumbling blocks trying to get Chinese representation there in terms of inspections. Through this venture we have achieved that.”

According to Shaun Janse Van Rensburg, GIG chief financial officer, there continues to be a constant flow of commodities with a little bit of everything being inspected – from manganese to copper, chrome or coal.

“We are finding that the prices have bottomed out so people seem to be stockpiling. It is a very interesting industry at the moment to be working in.”

GIG launched its metals and minerals division in 2009 in the midst of a global recession. Since then the division has gone from strength to strength, says Sakoschek.

“There are a lot of new projects happening within the industry, especially with the Chinese interest in Africa. They are plugging billions of dollars into the continent,” said Janse van Rensburg. “At the moment the export of minerals has slowed a bit but when one commodity is down there is always another one that is in demand.”

According to Sakoschek, the quality of southern Africa’s mining products remains high, being of international standard.

Inspections company signs deal with Chinese major

Stefan Sakoschek … ‘Now there is an additional inspections company that directly represents the Chinese in southern Africa.’

By Ed Richardson

More power is needed to sustain a gold rush in Tanzania.

The country is one of the fastest-emerging gold producers in Africa, and is now the fourth-largest African gold producing country after South Africa, Ghana and Mali.

However, costs are high due to a shortage of power. Many of the gold mines have to generate their own electricity.

Demand for power has created another opportunity in the East African country – generation by private companies.

Profitable mining operations have created sustainable demand, with more investment in the pipe-line, and the Tanzanian government has already created a supporting regulatory environment.

Power shortage takes gleam off Tanzanian gold

January 2012 Mining & Minerals 19

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By James Hall

The movement of minerals by rail keeps many Southern African nations’ railway

systems profitable, Gideon Mahlalela, an executive with the Southern Africa Railway Association (Sara) told FTW. “It’s cheaper to move minerals and ore by rail. Look at Transnet Freight Rail. Its biggest customer is coal. Number two is iron ore. Its biggest movement of rail freight in the Cape is iron ore,” said Mahlalela.

DRC, Zambia and Zimbabwe are three Sara member states whose rail systems move minerals profitably in bulk. Botswana Railway is the country’s primary mover of bulk freight, and transports quantities of coal and copper. Namibia’s daily trains to SA are kept rolling by mining exports.

In its granite quarries that service the building needs of Europe, Lesotho would find a customer to justify the construction of that country’s first railway line, and has met

with Sara member rail companies to work on that goal.

“Swaziland Railways was founded on the movement of iron ore,” said Mahlalela, who is CEO of the company.

Although the Ngwenya iron ore mine was reopened this year to much fanfare, it has come to pass that the operations are restricted to the removal of mining dumps, which are hauled out by truck, and the work is expected to wind up in five years.

“There are 700 million tonnes

of iron ore in Swaziland at the Ngwenya Mine but no one has been licensed to take it out. We will rehabilitate the Ngwenya line to Matsapha (site of the railway’s inland container depot) when that happens,” he said.

No special rail equipment and thus no special capital outlay is required for the movement of most minerals.

“Heavy-duty wagons have to be used to transport iron ore, but ordinary wagons are used for other minerals, which are very light,” Mahlalela said.

Mining industry keeps rail on track

By Liesl Venter

The issues faced by the mining industry locally are not related to the quality of the product but rather the logistics of getting the product from the remote mining areas to accredited laboratories, says Global Inspections Group chairman and CEO Stefan Sakoschek.

“As a solution we have, as part of our expansion plans, embarked on a process where we set up and operate laboratories on site.”

Not only does this ensure a faster turnaround time but it is also more cost-efficient for our clients.”

“Everyone is in the process of recession-proofing their business – including us,”

said chief financial officer Shaun Janse van Rensburg. “All measures that cut costs are welcomed and actually implementing these measures is critical in the current economic times.”

He said one of the measures being implemented by GIG was the supply of bulk bags to clients for mining and other products. “We have an agreement in place to bring these bags in at a very competitive rate. They are not necessarily cheaper bags, but the bags can do multiple trips, so the cost per ton comes down. It is the rands and cents that make a difference and we are trying to be creative and inventive to lower the costs of the supply chain to benefit our clients and add value.”

Bulk bags help reduce logistics costs

By Liesl Venter

The mining and minerals industry is on an upward curve in Africa with an increase in cargo volumes seen in and out of mining areas in southern Africa, says Alwyn Rautenbach, CEO of Airlink Cargo.

“The outlook for 2012 is very positive as the prediction is one of continuous growth in the industry, especially throughout Africa, due to the natural resources still being discovered all the time.”

Airlink Cargo, a dedicated cargo ground handling and airfreight transport company serving the southern African market, recently converted a Jetstream 4100 aircraft into a freighter.

According to Rautenbach

this aircraft is ideal for the air transportation of cargo, especially for express cargo that is urgent for mining operations.

“We operate in specific mining areas such as Tete, Nampula and Ndola and it provides for a good market advantage into these destinations.”

Also with the number of international investors investing in Africa, business will keep going strong, says Rautenbach.

The major challenge for airfreight, however, remains the size of equipment being moved for mining operations. “Also one-way cargo traffic makes it expensive to operate freighter services. We are therefore constantly looking for alternative products that could balance the air transport market.”

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22 Mining & Minerals January 2012

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By Ed Richardson

A coal rush in the Tete province of Mozambique has opened up opportunities for

agriculture in the region.Seven coal seams with reserves

of up to 3 600 million tons of coal have been identified, and foreign coal miners are investing millions in the logistics infrastructure required to export the coal through the ports of Beira and Nacala, and to bring personnel and supplies into the mines in the Moatize and Mucanha-Vuzi coal basins.

The rebuilt and new road, rail and air links have opened up the region for agricultural production as well.

In addition to Tete, there is great agricultural potential in the Nampula and Zambezia provinces, which rely on the ports of Beira and Nacala, as well as Quelimane.

Coal miners are also calling for investment in Quelimane, and the building of a new rail link from Moatize in the Tete province. This is in addition to a new rail link from Tete to Nacala through Malawi.

The coal industry is not, however, expected to be the only beneficiary.

Mozambique’s government launched its “Green Revolution” agricultural campaign in Beira in July 2011, and is leveraging its Brazilian connection through the

Vale mining company, which has started exporting coal from its US$1.3-bn Moatize Coal mine.

In August, the first Brazilian farmers arrived to work in the Nacala development corridor in northern Mozambique.

According to state television TVM, they will be producing maize, sorghum and cotton on land made available to them by the Mozambican government under bilateral cooperation with the government of Brazil.

Mozambican Agriculture Ministry Officer Ventura Macamo told the TVM in an interview that 60 million hectares of fertile land would be made available to about 100 Brazilian farmers who had

shown interest in farming in the Portuguese-speaking nation.

Farmers will lease the land for a US dollar a hectare, and the offer is not restricted to Brazilians, he said.

The Green Revolution campaign includes the development of two other corridors – at Beira and Maputo.

The focus is on producing food crops maize, rice and sorghum.

Part funding for the US$300-million project comes from AGRA (Alliance for a Green Revolution).

Speaking at the launch of the Beira Breadbasket Investment Plan earlier this year, AGRA president Namanga Ngongi said “there is no

better time than now to endeavour to raise agricultural production and productivity in Africa given the rising food prices in the global markets.”

It also comes at a time when the dredging of the port of Beira – spurred and financed by the export of coal through the harbour – means that the farmers now have an efficient gateway for the importation of seed, fertilisers and agricultural equipment, as well as for the export of produce.

Internal road and rail links which are in the process of being upgraded to service the coal mines will also open up the local Mozambican, Zimbabwean and Zambian markets to the farmers.

A new coal terminal under construction in the port of Beira.

Mozambican coal mines trigger agricultural growth

Transnet plans to invest R3bn over the next five years at the Richards Bay Terminal in loading and off-loading equipment, conveyor belts and other handling equipment, Public Enterprises Minister Malusi Gigaba told business leaders in Richards Bay recently.

“My understanding is that presently less than 25 000 containers are handled at the RBT through the multi-purpose

terminal and that the service that this provides is adequate.

“We are however committed to ensuring that as these numbers increase we provide additional handling capacity to ensure that the port will not be a constraint on growth. For example, at around 100 000 containers a dedicated container quay can be established with specialised stacking equipment. At around 200 000 containers we can build a dedicated on

berth container facility.”The province currently

handles more commodities than all other ports combined and employs more people than all other provinces combined, said Gigaba. “KZN currently has five rail infrastructure networks and about six branch line networks. There are therefore plans to expand all our current major infrastructure, and in particular we intend expanding the coal export line to over

81 million tons per annum by 2016, the Richards Bay Coal Terminal and doubling the single line section between Stanger and Richards Bay,” he said.

This expansion of the coal export line will involve the migration of Eskom’s domestic coal from road to rail, the establishment of the Waterberg rail, port expansion and capacity allocation to junior miners, he added.

Big expansion plans for Richards Bay coal line

January 2012 Mining & Minerals 23

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By Joy Orlek

Thanks to innovative solutions and solid partnerships, the 4PL Group has recorded

increased volumes and increased profitability over the past year – and the outlook for the year ahead remains positive, according to minerals division business manager, Joost Hogewoning.

“The increase in business can be attributed to the recovery of the minerals market as a whole in a post-recession economy, and the lessons learned during the 2008/9 downturn in the market,” he said.

“The 4PL Group business model thrives on significant agricultural and mineral base tonnages, which assist in optimising the assets we use to transport the cargo – both imports and exports.

“The acquisition of AFGRI LOGISTICS – and along with it an exclusive supply agreement – has significantly increased the agricultural base tonnages, and therefore makes our mineral service offerings that much more attractive.”

Once the EU financial situation improves, Hogewoning is

confident of a dramatic increase in volumes.

Established five years ago, the 4PL Group provides a blend of business models ranging from fourth party logistics solutions to third party logistics services.

The commodities industry has been a strong focus, says Hogewoning, and the company consistently works on re-engineering its service offerings within this sector.

“We offer road and rail transport, and this includes more than 260 dedicated vehicles as well as our own rail capacity. We also have direct ties with TFR, NRZ and CFR which gives us access to their rail capacity if our own facilities are fully utilised.

“We service all major ports and routes in southern Africa, ranging from short hauls to cross-border deliveries.”

The company currently serves South Africa, Mozambique, Botswana, Tanzania, Zambia and Angola.

Contract management is one of its focus areas. “Here we oversee and manage clients’ supply chains on an open-book basis. We provide

the customer with daily detailed feedback on volumes executed, non-conformances, exceptions, overall project status and progress reports. Not only is our focus here on reporting, but also on assisting our customers to remedy any issues swiftly and efficiently.”

The company’s technology business (LMS) provides the industry with weighbridge technology, described by Hogewoning as unique. “It allows

our customers to keep track of all cargo movements via secure web access in real time. LMS also places weighbridges and operators at sites where the need exists.”

As the world looks ahead to a somewhat uncertain future, Hogewoning believes the challenge for 2012 will be to remain competitive in an ever-expanding industry, and for the company to continuously develop its service offerings.

Recovery in minerals market helps grow volumes

The 4PL Group provides a blend of business models ranging from fourth party logistics solutions to third party logistics services.

The mining and minerals industry remains vital to the economy, according to Jonathan Sims of Core Freight Systems – provider of software used by a diverse client base managing imports and exports through South Africa.

“This,” he told FTW, “despite the relative decline of its contribution over the past 10 years, while other economic sectors have grown within the Republic.

But, from the logistics industry viewpoint, Sims added, it still has to be noted that over 50% of merchandise exports are related to mining (if secondary beneficiated mineral exports

are added). Also, that mining industry export sales increased by 26.8% to R224.2 billion for 2010.

“The industry thus provides an important market for logistics service providers,” Sims said.

Of equal importance from an SA-based freight forwarding and clearing operator perspective, is the opportunity offered by the growth of the mining industry in the total Southern African Development Community (SADC) region.

“The mining and minerals sector is estimated to account for 60% of the region’s foreign currency earnings, and is thus a significant regional activity

in Angola, Congo, Tanzania, Botswana, Zambia, Namibia and Mozambique.”

This is where SA’s traditional position as the “international gateway” to many of the sub-Saharan countries gives it an advantage in the provision of both import and export expertise required by these countries.

“This supports the primary mining activity, and then the secondary development which it stimulates,” Sims added.

“SA-based operators should leverage the established infrastructure and the local skills to ensure their participation and contribution to this important sector in the region.”

SA’s regional gateway status offers big benefits

Jonathan Sims … ‘Over 50% of merchandise exports are related to mining.’

January 2012 Mining & Minerals 25

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26 Mining & Minerals January 2012

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By Liesl Venter

South Africa’s minister of mineral resources, Susan Shabangu, remains

committed to creating a favourable and globally competitive mining sector in South Africa.

According to a spokesman for the minister, domestic and global investments into the economy are very much a part of the equation and the Chinese mining investors in particular have an important role to play in the expansion of South Africa’s mining and industrial industries.

A recent analysis by the department of mineral resources showed that the value of South Africa’s mineral exports to China for the past four years indicated a compounded annual growth rate of over 50%, which is projected to grow even more as this growth is linked to the galloping growth of the Chinese economy.

Speaking at a recent event in Johannesburg, Shabangu said partnerships between South

Africa and Chinese mining investors were critical as they could be used – jointly – as a springboard to access mining projects in other jurisdictions.

“It is worth noting that the South African government took a decision in 2010 to actively participate in the mining sector through the creation of a state-owned mining company (Somco), which is a vehicle in the hands of the state that will be used to advance our

country’s national strategic objectives,” Shabangu said on her last visit to China.

South Africa’s mining sector contributes about 8% to the GDP, which is further increased to 18% when taking into account the indirect effect of mining on the economy. The country continues to rank amongst the top 10 in terms of production of minerals such as manganese, iron ore, gold, chrome and ferrochrome.

SA-China mining partnerships ‘critical’

By Liesl Venter

Efforts to increase rail transportation efficiencies in South Africa are paying off.

According to Bheki Sibiya, chief executive of the Chamber of Mines, the improved services are helping the mining industry.

From July 2011 to end October 2011, the coal delivered to Richards’ Bay Coal Terminal by Transnet Freight Rail per month was in excess of six million tons.

This figure is significantly higher than the 5.6 million tons that was delivered in March, said the Chamber in a statement.

Similar improvements in freight rail transportation of commodities have been noted on the Sishen to Saldanha Bay railway line for iron ore, and the Hot as Hell (north of Sishen) to Port Elizabeth Bay for manganese.

“This commendable increase in the number of

tons transported by Transnet Freight Rail to the various ports contributes significantly to the revenues accruing from exports through foreign exchange earnings into our economy. This is a welcome contribution in these uncertain economic conditions when governments are under pressure to improve their economies,” said Sibiya, chief executive of the Chamber of Mines.

Welcoming plans to relocate the manganese loading terminal

from Port Elizabeth to Coega where there is potential for expansion, he said the mining industry depended to a large extent on efficient freight rail transportation.

Sibiya added that the increased efficiencies in freight rail transportation for commodities helped the mining companies to deliver on their commitment to put the interests of South Africa first by operating in a manner that is beyond business as usual.

Mining industry benefits from improved rail efficiency

South Africa’s mining sector contributes about 8% to the GDP.

In its first move into the manganese mining market, Crossroads recently entered into a contract for the distribution and on-site provision of fuel with Tshipi E’ Ntle, a manganese mine in the Northern Cape.

The Tshipi E’ Ntle manganese mine is a recent development that is aiming for an annual output of 2.4 million metric tonnes for the next 60 years, with hopes of pushing this number to five million, economic circumstances allowing.

The contract involves the provision of on-site fuel to be delivered from the Kroonstad terminal to a storage facility on the mine. As the mine is opencast, which calls for a lot of earth moving equipment, it will use a lot more fuel than a conventional underground mining operation, and the provision of fuel also becomes more strategic, said Crossroads chief executive officer Gerhard van der Horst.

The company expects to transport up to 1.5 million litres of fuel per month.

Crossroads lands fuel distribution contract

January 2012 Mining & Minerals 27

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By Liesl Venter

The mining and minerals industry in Namibia is on a roll with a new

R24-billion steel mine expected to be opened soon and extensive offshore oil and gas drilling operations set to begin in the foreseeable future.

This bodes well for the country that has the fourth largest uranium deposits in the world at the Husab mine, says Nolito Marques, communications coordinator for Manica Group Namibia.

“The new steel mine is expected to have a yield of more

than 10 million tonnes of steel annually, while the country is also gearing up for the start of offshore oil and gas drilling operations within the next year or two. The oil and gas reserves are estimated at 11 billion barrels of oil.”

According to Marques, Manica Group Namibia, a Bidvest Namibia company, is ideally placed to offer extensive services to the mining industry. “We provide a seamless and integrated supply chain solution to various industries and companies across southern Africa.”

Marques says the company

has realigned its logistics service operations to accommodate the budding oil and gas activities.

This includes full logistics and shore-based support to exploration operations and drilling. The group has also expanded and modernised its warehousing and open storage areas to accommodate an

increase in mining equipment imports and mineral exports. This includes a direct railway siding link to its MLC warehouse. A computerised track and trace system is also being implemented.

“Despite the current forecasts of a recession, 2012 holds some promising growth for the local mining sector. Although the rand-dollar exchange rate, rising oil prices and low price of minerals such as diamonds and uranium have impacted negatively on export earnings of the Namibian mining sector, the general outlook is a positive one.”

Logistics realigned to accommodate oil and gas activitiesSteel mine to be opened soon

The new steel mine is expected to have a yield of more than 10 million tonnes of steel annually

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