Exxaro Pushes for More Rail Transport to Cut Manganese Export Costs in South Africa
Exxaro Resources is accelerating efforts to move more manganese by rail instead of road as the mining company seeks to lower logistics costs and improve operational efficiency following its expansion into South Africa’s manganese sector.
The company is working with state-owned freight operator Transnet and other industry stakeholders to increase rail capacity as South Africa opens parts of its rail network to private-sector participation.
Exxaro Chief Executive Officer Ben Magara said enhancing rail logistics remains a strategic priority as the company integrates its newly acquired manganese assets.
According to Exxaro, transporting manganese by road costs approximately 37% more than rail transport.
Logistics expenses currently account for about 43% of the free-on-board (FOB) cost of exporting manganese, highlighting the importance of improving freight efficiency.
“We’re going to work with Transnet to see whether we can move more volume by rail,” said Johan Meyer, Exxaro’s Head of Metals.
The company, traditionally one of South Africa’s largest coal producers, completed the acquisition of manganese assets valued at 10.6 billion rand (about $646 million) in March.
The move forms part of Exxaro’s broader strategy to diversify its portfolio beyond fossil fuels and expand its exposure to minerals critical to future industries.
Among the acquired assets is the Tshipi Borwa Manganese Mine, which exports roughly 3.5 million metric tonnes of manganese annually, with most shipments destined for China.
Despite the mine’s significant export volumes, approximately 46% of its manganese output is currently transported to ports by road, according to Exxaro’s capital markets presentation.
“We need to ensure we have a long-term strategy that allows us to move as much product as possible by rail,” Meyer said.
South Africa holds an estimated 80% of the world’s known manganese resources and accounts for around 42% of global manganese exports, making it the world’s leading exporter of the metal.
Manganese is a critical raw material for steel production and is increasingly used in battery technologies that support electric vehicles and renewable energy storage systems.
However, the country’s mining industry continues to face logistical challenges as Transnet grapples with years of underinvestment, infrastructure constraints, cable theft and vandalism, all of which have reduced freight rail capacity.
The resulting bottlenecks have forced some mining companies to curb production, while others have relied more heavily on road transport despite its significantly higher costs.
Exxaro believes that expanding rail capacity will enhance export competitiveness, lower operating expenses and strengthen the long-term profitability of its growing manganese business as global demand for industrial and battery minerals continues to increase.
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