JOHANNESBURG, June 22 – Exxaro Resources is seeking to transport more manganese by rail rather than road as it looks to reduce logistics costs and improve operational efficiency following its expansion into South Africa’s manganese sector.
The mining company said it is working alongside other industry participants and state-owned freight operator Transnet to expand rail capacity as the government opens parts of the country’s rail network to private sector investment.
Chief Executive Officer Ben Magara said improving rail logistics is a key priority for the company as it integrates its newly acquired manganese operations.
According to Exxaro, transporting manganese by road is approximately 37% more expensive than using rail, while logistics account for around 43% of the free-on-board cost of exporting the bulk mineral.
“We’re going to work with Transnet to see whether we can issue more on rail,” said Exxaro’s Head of Metals, Johan Meyer.
Exxaro, traditionally one of South Africa’s largest coal producers, completed the acquisition of multiple manganese assets worth 10.6 billion rand (approximately $646 million) in March as part of its strategy to diversify beyond fossil fuels.
The acquisition includes the Tshipi Borwa Manganese Mine, which exports approximately 3.5 million metric tons of manganese annually, with the majority of shipments destined for China.
Currently, around 46% of manganese produced at the mine is transported to export ports by road, according to the company’s capital markets presentation.
“We need to make sure that we have a strategy long term to say, can we not put everything on the rail?” Meyer said.
South Africa holds approximately 80% of the world’s known manganese resources and accounts for around 42% of global manganese exports, making it the world’s largest exporter of the metal.
Manganese remains a critical raw material for global steel production and is increasingly being used in battery technologies that support electric vehicles and renewable energy storage.
However, South Africa’s mining industry has faced persistent logistical challenges in recent years as Transnet has struggled with underinvestment, cable theft, vandalism and infrastructure constraints that have reduced freight rail capacity.
These bottlenecks have forced some mining companies to limit production while others have relied more heavily on trucking despite significantly higher transport costs.
Exxaro believes expanding rail capacity will improve export competitiveness, reduce operating expenses and strengthen the long-term profitability of its growing manganese business as global demand for battery and industrial minerals continues to rise.
