Transnet eyes 72 million tonne iron ore demand

by Trust Matsilele 0

Transnet is refurbishing its port infrastructure to the value of seven billion rand targeting an estimated 72 to 74 million iron ore demand.

The freight logistics chain said iron ore was a very important commodity for the economy of South Africa together with the organisation.

(READ MORE: Transnet invests in R50BN train project)

“We are looking into the 72 to 74 million tonne demand of iron ore that will be required to be handled through our facility,” Velile Dube, general manager of Transnet’s operations and port terminals told CNBC Africa.

“The amount will go towards the refurbishment of our system and conveyor system to be able to export that volume.”

Dube said it is very important for Transnet to take a long term view as to how the company will invest in port infrastructure to be able to support the export of iron ore.

“Our philosophy in Transnet port terminals has always been to invest in capacity ahead of the validated demand,” he added.

“In the last five years we have spent close to a billion rand investing in the relevant equipment to support the export of iron ore.”

Transnet has been focusing on refurbishing equipment in the mid-life to make sure that it is ready to export 80 million tonnes of iron ore.

“I think the investment that we have made in the last five years, we are planning to make in the next 10 years in the order of seven billion rand in the port infrastructure to be able to support the export of iron ore,” Dube posited.

“It’s a long term view that you have to take in this sort of infrastructure that is why it is so important to invest ahead of the demand.”

JSE-listed Grindrod group has also been linked to the Maputo port that will see a further 750 million US dollar infrastructure investment in Mozambique posing a threat to Transnet’s long term ambitions.

Dube says he would rather see this more complimentary than competition.

(READ MORE: Australia’s iron ore production strains other economies)

“We welcome that sort of development because I think as a region we do need to see that level of development in our system in order to complement each other rather than compete against each other,” he said.