Exxaro and Transnet forge agreement to boost logistical performance in South Africa

Exxaro Resources and Transnet, acting through its operating division, Transnet Freight Rail (TFR), have formally entered into a service agreement aimed at enhancing performance as part of their existing long-term agreement.

This collaborative initiative is designed to not only benefit both parties but also to bolster the national economy.

Under the terms of this agreement, Exxaro and Transnet will work together to refine their logistics channels, particularly in relation to Exxaro’s recently announced turnaround plan for its Leeuwpan coal mine in Mpumalanga.

The partnership is built on the foundation of clear performance expectations and the establishment of joint planning initiatives that seek to optimise rail capacity while ensuring long-term logistical efficiency.

Ben Magara, CEO of Exxaro, expressed optimism about this strategic alliance with Transnet.

“We believe this service arrangement strategically unlocks value for Exxaro and capacitates sufficient strategic levers for the Group,” Magara said.

“The agreement is good for the national economy and specifically, Transnet’s commitment to assist Exxaro in minimising job losses and sustain mine viability. We thank Transnet for the constructive manner in which this agreement has been reached.”

Transnet Group CEO, Adv Michelle Phillips, said the agreement would unlock significant value for the industry. 

“We are confident that this agreement will unlock significant value not only for Transnet and Exxaro, but for the broader industry and economy. It reflects a shared commitment to rebuilding trust and delivering on our respective mandates for the benefit of all stakeholders,” Philipps said.

The formalisation of this agreement signifies a pivotal step towards rebuilding trust and cooperation between the entities, aligning their goals with national objectives aimed at strengthening South Africa's trade and logistics networks.

With both Exxaro’s dedication to operational efficiency and Transnet’s mandate to ensure the security of logistics supply, this partnership underscores a collective effort to enhance the economic framework of the nation.

BUSINESS REPORT