OPIS Insights

Transnet is on the road to recovery with South Africa’s rail operations significantly improved so far this year, especially on the coal line where the state-run company still hopes to hit 60 mt/y, the firm’s chief executive told McCloskey.

In an interview at the Transnet Academy in Johannesburg, CEO Michelle Phillips said rail capacity for commodities such as coal, manganese and chrome have increased in the first half, briefly hitting a record high.

Phillips said rail shipments rose to a weekly peak of 3.7 mt recently but was then hit by a train derailment that impacted 1.00 mt in a week—highlighting the continued ups and downs of operating in South Africa.

Phillips, who has been widely credited for mending strained industry relations since taking over last year, believes Transnet can still meet its 60 mt target for railing export coal in financial year ending March. In FY2025, it railed 57.6 mt, up from a 30-year low of 48.5 mt in FY2024.

To accomplish this, Transnet will need to significantly step up its performance after reaching an annualized run rate of just 54 mt in the January-June period.

The coal industry is desperate for Transnet to return to its normal rail rate capacity of above 70 mt/y, as railing to the Richards Bay Coal Terminal (RBCT) is by far the most cost-efficient logistical option for exporters. Transnet hopes to reach well above 70 mt/y within three years.

More broadly, Transnet is also improving its capacity on other rail corridors, including manganese, chrome and iron ore.

South Africa’s government is looking to increase commodity railing capacity to 180 mt in FY2026, an ambitious 13% increase from FY2025’s 160 mt, with the help of private rail operators for the first time.

Last month, the transport department shortlisted 11 private train operating companies to gain access to its main commodity lines. The government aims to complete contractual talks with the companies by December.

Phillips welcomed the addition of private rail companies but said Transnet would continue to hold on to the capacity it already operates.

For manganese, Transnet has recently finalized 10-year export rail agreements with nearly all of South Africa’s major exporters. Phillips said private companies would only have access to surplus rail capacity beyond these agreements.

Separately, Phillips also told McCloskey that she was optimistic that Transnet’s locomotive issues could soon improve.

The limited availability of locomotives has been one of the major causes for Transnet’s poor performance over the past few years. A recent court order has ruled in favor of Transnet, allowing the rail operator to use spare locomotive parts manufactured by the China Railway Rolling Stock Corporation (CRRC).

The spare parts have been locked up for years due to a legal dispute between the two companies, which have left dozens of locomotives inoperable.