ceo21 Oct 2021 19:52
The issues have been well covered widely and they fall in two categories: security and maintenance challenges at Transnet. Clearly, when we announced our interim results we said that while there were problems at Transnet we developed action plans to be able to manage our situation. Transnet has not been able to improve their performance since they came out of the shutdown. We have had to invoke some of [the] actions that we said we would do, which include making sure that the highest margin coal finds a seat on the train. We also worked quite extensively with Transnet to help with the security situation. I’m told actually that where we’ve deployed security as an industry – a stretch of about 240 kilometres – it’s only two weeks, early days, but we haven’t had a single security incident, which suggests that was done works.
However, if we don’t see a significant improvement, we think we’ll be stock-bound between now and year-end, which is the reason why we’ve had to issue the Sens that we issued this morning.
FIFI PETERS: Okay. Just in simpler language, you are prioritising the coal that makes you the most money, that has the highest margins – and that is going out for exports. So what’s happening with the rest?
JULY NDLOVU: We have had to stockpile coal at our mines. So when we say we are stock-bound, what we mean is we are running out of stockpile space in our mines, and we predict that sometime between now and year-end we’ll be running out of stockpile space.
FIFI PETERS: Fine. Then you’ve got this idle stock that’s sitting there that could have been making money for your business – and even for Sars in terms of the mining taxes that we have seen – but that is not [happening]. So how long can it stay there, and what is the potential loss in sales as a result?
JULY NDLOVU: It is significant. We said that our stocks are likely to increase I think …. by about 1.3 million tonnes, depending on what price you take. That could be anything between R2 billion and R10.5 billion worth of revenue tied up, which would have been contributed to this economy.
FIFI PETERS: Hm. What have you had to tell some of your clients, July?
JULY NDLOVU: Look, this has been quite a challenging time for our clients but, given that they understand the issue and the work that we’re doing, we are actively engaging with TFR [Transnet Freight Rail] to try and resolve some of the maintenance issues now that we’ve got the security intervention in place. I must say, as challenging as things are, there is a willingness for us to work together with Transnet, but clearly it’s going to take time to find the solutions that we need.
FIFI PETERS: What kind of concessions are they making for you? You’re losing out on revenue here. What is Transnet doing to compensate you for this?
JULY NDLOVU: There’s nothing much they can do, unfortunately, much as we want them to. At this point in time, quite honestly, Fifi, my first priority is to ensure that we as an industry
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