South Africa’s Rail Reforms: Transnet, Private Sector, & Mineral Exports

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Introduction

South Africa is implementing significant reforms to its rail logistics system, with Transnet issuing licenses to 11 new private operators in August 2025. These initiatives, along with substantial financial investments, are designed to enhance mineral distribution across both local and export markets.

African Mining Week Conference

The reforms will be presented at the African Mining Week (AMW) conference, scheduled for Cape Town from 1–3 October 2025. A dedicated panel discussion, titled “From Mines to Markets: Strengthening Trade and Connectivity for Africa’s Mineral Future,” will address the readiness of the continent’s logistics sector to accommodate increased mineral flows.

Private Sector Participation and Licensing

In August 2025, South Africa authorized licenses for 11 new private operators to provide train and logistics services on the national rail network. Transnet, the state-owned entity, will issue 10-year licenses, encouraging private investment in infrastructure. This is projected to unlock an additional 20 million tonnes of freight annually from the 2026/27 financial year.

Strategic Goals and Capacity Expansion

This initiative aligns with the government’s objective of increasing annual rail haulage to 250 million tonnes by 2029, encompassing both mineral exports and other essential commodities. Transnet is also establishing long-term agreements with mining companies to enhance efficiency.

Key Partnerships and Investment

In August 2025, Transnet signed an agreement with Exxaro Resources to expand capacity between the company’s Leeuwpan coal mine in Mpumalanga and domestic, regional, and international markets. This deal supports Exxaro’s 2025 sales target of 38.3 to 42.4 million tonnes of coal, including up to 7.2 million tonnes for export. In July 2025, United Manganese of Kalahari (UMK) finalized a 10-year agreement with Transnet to transport manganese from its Northern Cape operations to ports for export. The government approved an additional R94.8 billion (USD 5.3bn) support package for Transnet in July 2025, following an earlier R51 billion package in May 2025. The New Development Bank has provided a $278 million loan, and the African Development Bank has approved a USD 1 billion loan to modernize the country’s logistics infrastructure.

Conclusion

South Africa is undertaking significant reforms in its rail logistics sector, including private sector participation, long-term agreements with mining companies, and substantial financial investments, with the goal of enhancing mineral distribution and increasing rail haulage capacity.

Company Summary

Exxaro Resources: A mining company.

United Manganese of Kalahari (UMK): A mining company.

Transnet: A state-owned operator.

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