Exxaro Targets Increased Rail Transport for Manganese Exports to Cut Costs

South African mining company Exxaro Resources is ramping up efforts to transport more manganese by rail as it seeks to lower logistics costs and improve operational efficiency across its recently acquired manganese assets.

The strategy comes as the diversified miner expands beyond coal and strengthens its position in the critical minerals sector, where manganese is increasingly viewed as a key component in the global energy transition.

Exxaro Seeks Cheaper Logistics Solutions

Exxaro executives say rail transportation offers significant cost advantages over road haulage, particularly for bulk commodities such as manganese.

According to the company, transporting manganese by road is approximately 37 percent more expensive than moving the mineral by rail.

Logistics expenses currently account for about 43 percent of free-on-board costs for manganese exports, making transportation efficiency a critical factor in maintaining profitability.

Company officials indicated that reducing logistics costs remains a priority as Exxaro integrates its newly acquired manganese operations into its broader business portfolio.

Collaboration With Transnet Underway

Exxaro is working alongside other mining companies and state-owned freight operator Transnet to improve rail freight capacity and enhance export logistics.

The company is exploring opportunities to move a greater proportion of manganese shipments from road to rail as Transnet opens parts of its network to increased private-sector participation and investment.

Exxaro Head of Metals Johan Meyer said the company is engaging with Transnet to identify ways of expanding rail usage and reducing dependence on trucking.

The goal is to develop a long-term logistics strategy that maximizes rail transport while improving overall supply chain efficiency.

Manganese Acquisition Supports Diversification Strategy

The push for improved logistics follows Exxaro’s acquisition of several South African manganese assets valued at approximately R10.6 billion.

The transaction, completed in March 2026, represents a major step in the company’s diversification strategy as it reduces its reliance on coal and expands into minerals that support future industrial and energy markets.

The acquisition includes interests in key manganese operations, strengthening Exxaro’s exposure to one of South Africa’s most strategically important mineral resources.

Management believes manganese will play an increasingly significant role in future growth opportunities due to rising global demand.

South Africa Dominates Global Manganese Supply

South Africa remains the world’s leading source of manganese resources and exports.

The country holds an estimated 80 percent of global manganese reserves and accounts for approximately 42 percent of worldwide manganese exports.

Traditionally used in steel production, manganese is increasingly gaining importance in battery manufacturing and renewable energy technologies.

The growing adoption of electric vehicles and energy storage systems has contributed to stronger long-term demand projections for manganese, elevating its status as a critical mineral within the global energy transition.

Tshipi Borwa Mine Key to Export Plans

One of Exxaro’s most important manganese assets is the Tshipi Borwa mine, which exports approximately 3.5 million tonnes of manganese annually.

A significant portion of production is shipped to international markets, particularly China, which remains one of the largest consumers of manganese products globally.

Despite the scale of exports, approximately 46 percent of the mine’s manganese shipments are currently transported by road rather than rail.

Exxaro believes shifting more of this volume onto rail networks could deliver substantial cost savings while improving operational efficiency.

Logistics Challenges Continue to Impact Mining Sector

South Africa’s mining industry has long faced challenges related to transport infrastructure and export logistics.

Bulk mineral exports have been constrained by ongoing operational difficulties within the country’s freight rail network.

Industry stakeholders have frequently cited infrastructure vandalism, cable theft, maintenance backlogs and years of underinvestment as key factors limiting freight capacity.

These challenges have forced some mining companies to rely more heavily on road transport, despite significantly higher costs.

In certain cases, logistical constraints have also contributed to lower production levels as companies struggle to move sufficient volumes to export terminals.

Rail Expansion Seen as Strategic Priority

Mining companies increasingly view rail infrastructure improvements as essential for maintaining South Africa’s competitiveness in global commodity markets.

Industry leaders argue that enhanced rail capacity would reduce export costs, improve reliability and strengthen the country’s position as a leading supplier of bulk minerals.

For Exxaro, greater rail utilization could improve margins on manganese exports while supporting long-term growth plans in the metals and critical minerals sector.

The company believes collaboration between government, Transnet and private industry will be necessary to unlock the full potential of South Africa’s freight logistics network.

Manganese Positioned for Future Growth

As demand for critical minerals continues to rise, Exxaro is positioning itself to benefit from the growing importance of manganese in both traditional and emerging industries.

The company’s investment in manganese assets reflects broader trends within the global mining industry, where producers are increasingly diversifying into minerals linked to renewable energy technologies and electrification.

By reducing logistics costs and improving export efficiency, Exxaro aims to strengthen the competitiveness of its manganese operations while supporting South Africa’s role as a major supplier to global markets.

The success of these efforts will depend heavily on improvements in rail infrastructure and the ability of industry stakeholders to create a more efficient and reliable transport system for bulk mineral exports.