1 COMMENT ON THE ECONOMIC REGULATION OF TRANSPORT

Transcript:1 COMMENT ON THE ECONOMIC REGULATION OF TRANSPORT:
1 COMMENT ON THE ECONOMIC REGULATION OF TRANSPORT BILL BY CHRISTIAN TEFFO Who we are and what we do 2 The Minerals Council represents more than 70 large, medium-sized and small and emerging miners, as well as three associations that collectively represent more than 200 entities. These members make up around 90% of South Africa’s mineral production by value. Our members 3 4 The Minerals Council has undergone a number of name changes in its history necessitated by mining and political developments in South Africa. Our brief history 5 The Minerals Council continuously looks for ways to advance the position of and make improvements in the South African mining industry and participates in various initiatives and projects in areas relating to health, education, policy and regulations. Our key departments: Minerals Council at work 6 Minerals Council at work, cont'd 7 Our strategy 8 The Minerals Council welcomes the opportunity to comment on the Economic Regulation for Transport Bill which has been long awaited. We have previously commented into the bill, the process has been inclusive and goes back more than 10 years CONSULTATIONS 9 Mining sector: Share of intermediate input costs to total costs 10 Total costs = R574.8 bn (includes value added items) 26% Compensation of employees (R151.5 bn) R70.7bn Mostly administered costs The minerals industry uses rail, road and our ports to deliver their products to customers Transport cost to mining is about 12.3% of total costs(R 70 billion) Transnet Freight Rail transported about 226 Mt of ore in 2018 There is limited rail and port capacity which results in the use of road and international ports which increases costs Road carries a cost premium of over 25% from rail HOW DOES THE BILL AFFECT US 11 5.5 million tons of manganese was transported from the northern cape on rail to port Elizabeth and some of it on the road. The rail and port capacity could be upgraded to reduce reliance on road In 2019 the cost of transporting manganese increased by 8.15 % which is significantly above the national producer inflation of 4,7 % For instance manganese largest input cost is transport at 34% of the total input cost Over the last decade the cost of logistics have doubled for manganese HOW DOES THE BILL AFFECT US(MANGANESE) 12 In terms of rail the minerals industry transports about 70 million tons of coal on The Transnet Freight Rail