Kumba Iron Ore warned yesterday in a statement that the force majeure declared by parastatal Transnet last week – after their workers downed tools and embarked on a strike over wages – will knock its production and export sales.
Also yesterday, coal producer and exporter Thungela Resources said it was keeping an eye on the situation, while other JSE- listed mining firms, including Exxaro and Glencore, kept mum on the disruption.
Kumba said it had implemented contingency plans to safeguard its assets and minimise the impact on operations.
"However, as a result of the disruption to Transnet’s rail and port services, the estimated impact on production is approximately 50 000 tonnes per day for the first seven days, and thereafter approximately 90 000 tonnes per day. Export sales will be impacted by about 120 000 tonnes per day," said Kumba, which is majority owned by Anglo-American.
This follows two unions’ – the United National Transport Union (Untu) and the South African Transport and Allied Workers Union (Satawu), which together represent most Transnet workers – rejection last week of Transnet's offer of a 3% to 4% wage rise, saying it was below South Africa's annual inflation rate, which was 7.6% in August.
Kumba said it would continue to monitor the situation closely and provide further updates, as appropriate.
Thungela Resources said it continued to engage with Transnet to understand further developments, and in particular the impact of the declared force majeure on its business.
But in a statement it released last week, the group said industrial action would interrupt railing from its operations at the Richards Bay Coal Terminal (RBCT).
"Rail constraints over recent months have resulted in relatively high stockpile levels on our operations. Operations are, however, able to run without rail for a further seven days without experiencing a significant impact on production," it said.
The group said RBCT operated independently of Transnet and should be able to continue to load vessels, subject to Transnet continuing to provide a number of services required for the berthing and unberthing of vessels, for example pilots and tugboats.
"Given RBCT’s ability to load vessels and Thungela’s ability to draw down on healthy stock levels at port, we currently expect the impact on sales for the fourth quarter of 2022 to be limited," it said.
Thungela said that should the strike be extended to two weeks, it would be forced to further curtail production, with the potential impact being a reduction of up to 300kt of export saleable production.
"These include intensified helicopter surveillance, heightened focus on depots, and an increase in the number of reaction teams on the ground. We continue to engage with Transnet to understand further developments and the potential impacts on our business," it said.
Glencore, the largest natural resources company in the world, said it had no comment, while coal producer Exxaro was unavailable for comment.
This is the second time this year that Transnet has been under a force majeure. In April, the company said it might not be able to fulfil its agreements with Coal Export Parties due to unforeseeable circumstances.
Transnet's rail arm, Transnet Freight Rail, has been plagued by the massive theft of copper cables and rife vandalism of its coal line, which has dented the company’s finances and hampered its ability to operate.
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