Exxaro Resources wants to move more of its manganese exports by rail rather than road in South Africa. The reason is straightforward: road transport is materially more expensive, and logistics are now taking a large share of export costs.
According to Exxaro, hauling manganese by road is 37% more expensive than using rail. Logistics costs account for 43% of free-on-board costs for the bulk mineral. For a sector built on volume, that changes the margin equation.
Logistics Is Becoming Part of the Mining Cost Curve
The issue is not only production. It is the ability to move mineral output from mine to port at a competitive cost.
Exxaro recently expanded into manganese through a major acquisition, as part of its diversification away from coal and into minerals linked to steel and energy transition supply chains. But the value of that strategy depends partly on transport efficiency.
At the Tshipi Borwa mine, around 46% of annual manganese volumes are still transported by road. The mine exports about 3.5 million tonnes per year through the ports of Gqeberha and Saldanha. That means more than 1.5 million tonnes are exposed to higher road transport costs.
Transnet Becomes a Margin Variable
Exxaro is now working with Transnet to increase rail capacity. That matters because South Africa’s rail constraints have become a recurring pressure point for bulk exporters.
When rail underperforms, mining companies do not simply face delays. They face higher logistics costs, lower operating flexibility and weaker export competitiveness. In manganese, where volumes are large and margins depend heavily on efficient movement to port, the transport mode can become as important as the mine grade.
This is why the Exxaro case is broader than one company. It shows how freight systems are becoming a direct determinant of mining profitability.
Why It Matters
Exxaro’s manganese rail push shows that Africa’s critical minerals story is not only about reserves, licences or global demand. It is also about corridors, rail capacity, ports and cost discipline.
For mining companies, logistics is becoming a margin issue. For governments, it is becoming an industrial competitiveness issue.
If rail systems cannot absorb bulk mineral flows, more value will be lost before commodities even reach export markets.