Theft on Transnet lines throws sand in Kumba wheels as it spreads westward

The cable theft malaise that has besieged Transnet’s railway line connecting Durban to Gauteng has spread to the iron ore-rich Northern Cape, leading to a suspension of operations on the rail line transporting the mineral to Africa’s largest export facility, Saldanha Terminal.

The state-owned freight and rail operator said on Thursday it was forced to halt operations on the lucrative 861km rail line linking Northern Cape to Saldanha Bay on the west coast of the Western Cape.

The cash-strapped entity said it became aware of the theft after a power failure late on Tuesday evening and on inspection found 11 spans of catenary and contact wire had been stolen near Olifantshoek in the Northern Cape. Operations were resumed late on Wednesday.

“The teams have commenced with the start-up plan and all the details on the train service have been shared with the respective customers. The security presence in the area has been increased and ongoing initiatives with law enforcement agencies and stakeholders are under way,” Transnet said.

Mining giant Anglo American’s subsidiary Kumba Iron has a significant presence in the Northern Cape and was affected by the stoppage, though it said the impact was not material.

Kumba has two primary operations in the province, the largest of which is a 76% stake in the Sishen iron ore mine in the province. The group also owns Kolomela mine near Postmasburg in SA’s biggest province by land size.

The group, worth about R140bn on the JSE exports its iron ore to China, Japan, South Korea and some countries in Europe and the Middle East.

According to its latest annual results, Transnet’s poor service cost Kumba R10bn in earnings last year along with a drop in the global iron ore prices.

Transnet Freight Rail (TRF) last year saw the ore corridor from Northern Cape to Saldanha set a weekly record of 1.3-million tonnes. The export of iron ore increased 4.5% to 54.5-million tonnes.

The spread of theft to the key rail line has worried industry players, as the Northern Cape to Saldanha line is the lifeblood of the iron ore industry.

Transnet’s Saldanha Iron Ore Terminal has an installed capacity of 57-million tonnes and accounts for about 96% of all iron ore exports from SA.

The capital-intensive terminal operates 24 hours a day and week after week with only Workers Day, Christmas Day and New Year’s Day classified as voluntary public holidays.

Business Day reported on Monday that Transnet TFR was under siege from vandals and thieves, with the entity asking for state intervention after rampant cable theft forced the 740km Durban-Gauteng container corridor to operate only four hours a day.

TRF said in its 2022 annual report there was an exponential increase in cable theft over the last five years. More than 1,500km of cable was stolen (a 1,096% increase in the length of cable stolen) with a net financial impact of R4.1bn.

The Treasury told legislators on Tuesday that TRF’s operations have been negatively affected by persistent security incidents, locomotive unavailability and the poor state of infrastructure. “Port productivity is significantly lower than benchmark African and European ports. Maintenance of critical equipment is the main contributor as the port of Durban seldom has higher than 60% availability of container equipment,” the Treasury said.

“One of the conditions attached to funding provided to Transnet in 2022/23 is that an independent review led by the National Treasury of all freight corridors and associated port operations will be undertaken with a specific focus on identifying opportunities for operational efficiency improvements.”

Kumba spokesperson Sinah Phochana said the closure of the rail line did not have a material impact on the group’s volumes, but other factors were affecting the group’s volumes.

“While in the past year, we have experienced challenges to the performance of the ore export channel line due to factors like maintenance issues and the effects of plagues of locusts which make the line slippery for the trains and necessitate speed restrictions, we have been working closely with Transnet, the Minerals Council SA, and through Operation Vulindlela to support the improvement of the line’s performance,” Phochana said.