By: OrePulse

Kumba Iron Ore Chief Executive Mpumi Zikalala said logistics constraints on Transnet's Sishen-Saldanha rail corridor have forced the company to plan production at lower levels, with the Anglo American subsidiary guiding 2026 output at 31 million to 33 million tons before rising to 35 million to 37 million tons in 2027 as rail performance stabilizes.

Speaking at the Joburg Indaba conference, Zikalala said Kumba had already reconfigured its operations around Transnet's constrained rail capacity on the 861-kilometer line linking its Northern Cape mines to the port at Saldanha. "We don't want to be where we are because in order to be competitive as a business, we actually need to up our volumes," she said.

Her comments came as Transnet pushes ahead with a R8.9 billion restoration program for the corridor, running through 2030, with about R2.2 billion spent in the current financial year. South African Transport Minister Barbara Creecy, visiting the line on Monday, confirmed the program's scope and spending. Work carried out during the line's annual shutdown, from October 6 to 16, included rail and sleeper replacement, ballast screening, turnout work, formation rehabilitation, and electrical and signaling upgrades aimed at improving reliability and future freight capacity.

Zikalala said rail performance has improved after years of decline but cautioned that the progress remains limited. "We've seen stability when it comes to performance, but I underline stability because it's stability with marginal gains," she said, adding that "there's still a lot that needs to be done." Restoring the network to full capacity, she said, would require "capital, it requires skills, and it requires speed."

Kumba's production guidance is tied directly to the pace of that recovery, with the company saying its ability to rebuild volumes toward the higher 2027 range depends on further improvements to Transnet's logistics performance.

In a separate discussion with Joburg Indaba chair Bernard Swanepoel, Zikalala highlighted the distance disadvantage facing South African iron ore producers. She said Kumba's mines sit more than 860 kilometers from port, farther than many competing exporters, while South Africa supplies less than 5% of global iron ore. "So we are further [away] than those we compete with," she said.

Despite the rail constraints, Kumba is continuing to invest in extending the life of its Northern Cape operations. The company is spending R11.2 billion on its UHDMS project at Sishen, a technology that will allow it to process lower-grade material accumulated over the mine's more than 70-year history, material previously classified as waste. Kumba has reported more than 1.5 billion tons of resources and reserves, with exploration continuing at Ploegfontein and Heuningkranz, near its Kolomela mine outside Postmasburg, adding to that base.

Zikalala said Kumba and the other members of the Ore Users Forum, which represents four major iron ore producers, are working closely with Transnet as the rail restoration proceeds. "We ask Transnet if there's anything that they need, and if there is, we jump," she said, noting that the producers' own success is tied to the state-owned rail operator's performance on the corridor.