IZA Africa Desk calls for the privatization and expansion of the Sishen-Saldanha ore railway line | Africa Mining Market

2021-12-02 01:54:22 By : Mr. Bill Wang

The only zinc refinery in South Africa closed in 2011, while the only other zinc refinery in Africa ceased operations in early 2020. In recent years, South Africa has imported up to 86,000 tons of refined zinc each year, and the current cost is R3.99 billion. Therefore, South Africa has to rely on imports from countries as far away as South Korea and Kazakhstan to import high-cost refined zinc denominated in US dollars, and has to pay additional transportation and transportation duties. Of course, if South Africa has its own source of refined zinc locally, this will greatly reduce the input cost of hot-dip galvanized steel for construction and mining.

Before being used as refined zinc in a galvanizing tank, zinc sulfide or zinc oxide ore must be processed into zinc concentrate at the mine, and then refined or transferred to coastal ports for refining or exported to overseas refineries. However, the key input for a competitive zinc concentrate supply depends on the cost of transporting the ore to the nearest refinery or port. Currently, there is a state-owned railway line from Sishen in the Northern Cape to Saldanha in the Western Cape.

"Why should this line be used exclusively by a company? The privatization of the Sishen-Saldanha line is a very hot topic. This line was opened in 1976 for use by the former state-owned Iscor, and has since been used by a company listed on the JSE. The company is the only beneficiary of the railway connection paid by South African taxpayers," said Simon Norton from Africa at the International Zinc Association (IZA) help desk.

Another pressing issue is the need to build a new railway line from Gamsberg and Prieska in the Northern Cape to the Sishen-Saldanha line so that zinc miners can export zinc concentrate to Saldanha Bay by rail. At present, zinc mining companies in the Northern Cape must transport ore by road, which is costly, time-consuming, and disrupts the national road network.

Norton also emphasized the urgency of rebuilding the national freight and passenger rail network, and may even adopt wider gauges to run faster and heavier long-distance trains. For example, the high-speed wide-gauge railway from Cape Town to Johannesburg will become the main driving force of the economy and promote civil engineering.

Investment in such critical railway infrastructure will lead to increased demand for refined zinc and galvanized steel in South Africa. "If the government only focuses on the growth of the railway industry, this will be the main stimulus for engineering, employment, and socio-economic development. This is a huge win-win situation," Norton commented.

The use of galvanized steel will ensure the longevity of railway infrastructure and promote local industries such as galvanizing plants, steel manufacturers and industrial painters. South Africa's galvanizing industry itself has shrunk from 38 companies to 24, and some of the largest pipeline galvanizing plants have been closed due to the economic recession.

The "dramatic decline" in the use of refined zinc in South Africa over the past decade is proportional to the shortage of major civil engineering projects and the decline in the growth and expansion of mining infrastructure. This is particularly important because more than 60% of the world's refined zinc is used to produce galvanized steel for construction and civil engineering. It includes structural steel, railway lines, power line masts and steel for underground mining.

"Zinc may be a little-known material outside the engineering world, but it is vital to the corrosion protection of structural steel and is a key barometer of the state of the civil engineering industry. If the decline in zinc continues unabated, then the South African government will Within a few years I realized a non-existent construction and infrastructure industry," Norton warned.

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