South Africa faces R50bn loss in export revenue as unions vow to step up port strike

SOUTH African bulk mineral exporters had lost 6.5 billion rand in revenue following an eight-day strike by railway and port unions that had been going on since October 6.

This is based on estimates by the Minerals Council today of R815m in lost daily revenue, equivalent to some 357,000 tonnes of shipments of iron ore, coal, chrome, ferrochrome and manganese which cannot be performed due to the strike.

Unions today rejected an improved wage offer by state-owned freight and logistics company Transnet and said they would step up the strike. Transnet has offered up to 5.3% improved pay, but Carestone Damons, a member of the United National Transport Union bargaining team, told Bloomberg News that employees would only consider a raise of at least 7%.

“The Minerals Council is deeply concerned that industrial action at Transnet will compound the losses that our bulk mineral exporting members are already experiencing as a result of Transnet’s difficulty in meeting targeted annual tonnages on its rail network and the throughput at ports,” the council said in a statement. .

Earlier this year, Transnet launched a force majeure event to the country’s coal producers due to the impact of copper cable theft, railway sabotage and parts availability. A new case of force majeure was declared on Monday following the strike.

The damage caused by the strike is not just the immediate impact, but the longer-term consequences of catching up delayed exports and imports, which will have a ripple effect on businesses and society at large, said the board. “The long-term damage to South Africa’s reputation as a reliable supplier to world markets must be considered by all parties,” he added.

It calculated that the Transnet strike and traffic jams had contributed to annualized revenue losses of R50 billion this year, 43% more than R35 billion last year. This covers lost revenue from exports of iron ore, coal, chrome, ferrochrome and manganese.

“The Minerals Council South Africa urges a speedy resolution to the strike affecting Transnet’s rail and port network which is costing the country, businesses and the mining sector billions of rands in trade, tax and business losses, damaging a already fragile economy. It said.

On average, South Africa exports around 476,000 tonnes of bulk minerals per day, worth R1.06 billion. “We estimate that only 120,000 tonnes of minerals worth R261 million are exported daily. Major mineral export ports are operating between 12% and 30% of their daily averages.

“In contrast, R151 billion could be gained from additional exports, with the co-benefits of employment in the mining sector increasing from 40,000 jobs to 500,000, with the tax authorities benefiting from improved tax revenues and higher incomes. for Transnet if all rail and port systems were run optimally and efficiently at design capacity,” the council said.

BusinessLive reported on Wednesday that some companies had offered to pay an extra tier on containers that could help bridge the gap between wage demand increases and employer Transnet’s supply.

Citing industry publication Cargo Movement Report, BusinessLive today said an additional levy of R148 per container has been offered to Transnet’s terminal handling charges.

Transnet did not specify whether it accepted or rejected the offer submitted by the companies. “Transnet is considering a number of industry options and offers to avoid a prolonged strike. These will be communicated to relevant stakeholders upon finalization,” he said.

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