JOHANNESBURG (miningweekly.com) – Another agreement involving collaboration between the public sector and the private sector in the field of rail transport service has been signed, this time between the Johannesburg Stock Exchange-listed Exxaro Resources and State-owned company Transnet Freight Rail (TFR).

Acting through its operating division, TFR has entered into a formal service agreement under the existing long-term agreement between the parties.

In terms of this agreement, Transnet and Exxaro will collaborate to improve the performance of logistics channels, including the making of a specific contribution towards the support of the critical turnaround plan for Exxaro’s Leeuwpan coal mine.

The agreement outlines clear performance expectations and joint planning initiatives to enhance rail capacity and optimise long-term logistics. This aligns with Exxaro’s commitment to operational efficiency and long-term sustainability; Transnet’s mandate to ensure the security of logistics supply; and the national objectives of strengthening South Africa’s trade and logistics.

Exxaro CEO Ben Magara expressed the belief that this service arrangement strategically unlocks value for Exxaro and capacitates sufficient strategic levers for the group.

“The agreement is good for the national economy and specifically, Transnet’s commitment to assist Exxaro in minimising job losses and sustain mine viability,” Magara stated in a release to Mining Weekly, in which he thanked Transnet for the constructive manner in which this agreement had been reached.

Transnet group CEO Advocate Michelle Phillips expressed confidence that the agreement would unlock value not only for Transnet and Exxaro, but also for the broader mining industry and the national economy.

“It reflects a shared commitment to rebuilding trust and delivering on our respective mandates for the benefit of all stakeholders,” said Phillips.

This partnership reaffirms both entities’ commitment to restoring and enhancing rail performance, promoting economic growth, and driving competitiveness and long-term sustainability within the mining and transport sectors.

The agreement follows Transnet and Hotazel Manganese Mines signing a ten-year contract under the third phase of the Manganese Export Capacity Allocation framework as well as Transnet and United Manganese of Kalahari signing a ten-year contract for the transportation of manganese by rail from UMK’s mine, also in the Northern Cape and also under the Manganese Export Capacity Allocation agreement.

Moreover, Minister Barbara Creecy last week announced that 11 of the 25 private train operating companies that applied to operate routes on Transnet’s rail network had met the requirements to do so and would now be entering into contract negotiations to enable them to gain access to the network and begin operating the routes – an announcement that represents a significant step in opening South Africa’s freight rail network, which has hitherto been monopolised by State-owned Transnet, to third-party operators.