South Africa is opening its rail network to private train operators in a commercial pivot to revitalize a key component of its transport and logistics infrastructure. A rail line that is crucial for shipments of the steelmaking ingredient to export markets, it said on Tuesday
The 861 km (535 mile) rail line, owned and operated by struggling state company Transnet, runs from Kumba Iron Ore’s (KIOJ.J), opens new tab Sishen mine in South Africa’s Northern Cape province to Saldanha port.
However, the line has been beset by derailments, and Transnet’s balance sheet “constraints” mean it is unable to run the line efficiently, said Kumba CEO Mpumi Zikalala.
Kumba, Africa’s top iron ore miner, has scaled down production after stockpiles rose to 7.5 million metric tons last year from 7.1 million tons the previous year.
“We believe that the entire line could be concessioned to a player who will be able to purely focus on this line and that could make a massive impact,” Zikalala said on a media call after Kumba reported a 45% slide in annual earnings.
Headline earnings per share dropped to 38.94 rand ($2.11), hit by lower prices and the rising iron ore stockpiles caused by lack of rail capacity, the company said.
Reuters/ Shakirat Sadiq
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