Ailing railways `cost Kumba R3bn a year`
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Resources Editor
SA COULD double iron-ore exports to China , but cannot because railways do not have capacity, Kumba CE Con Fauconnier said yesterday at the Chamber of Mines annual general meeting, which elected him to a second term as its president.
The chamber`s annual report, published yesterday, said `there are substantial capital deficits in both ports and railways which, combined with poor services and excessive price increases, are severely undermining the ability of the mining sector to grow trade and exports`.
Fauconnier said that Kumba was missing out on potential exports worth R3bn a year, while the report blamed outdated rolling stock and inefficient management.
Fauconnier said Transnet`s failure to boost capacity had restricted SA`s ability to take advantage of the global commodities boom.
`On a recent visit to China, it was made very clear to me that steel manufacturers there would be happy to more than double the tonnages of iron ore purchased from SA,` he said.
The Kumba CE said shortcomings in SA`s transport infrastructure made it impossible to meet demand from China and other potentially profitable commodity export destinations.
`The consequences of these missed opportunities impose a negative effect not only on the mining industry, but also on the country as a whole in terms of loss of foreign exchange earnings,` he said.
However, Fauconnier said he was optimistic that Public Enterprises Minister Alec Erwin`s announcement last month of an R165bn investment in the parastatals would so start addressing the problems.
`We don`t want a day to go past without something happening,` Fauconnier said. `Government has announced an infrastructure spending programme how do you deliver on that? `
Minerals and Energ y Minister Phumzile Mlambo-Ngcuka said government wanted to see delivery on new infrastructure `sooner rather than later `.
She said that there would be room for public- private sector partnerships in upgrading SA`s rail infrastructure, although she cautioned that it would not be handed over to the private sector.
The minister said that work should be hastened on planning the spending of Erwin`s R165bn investment in parastatals.
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