Durban - The coal export industry, which has seen a boost in demand as a result of the war in Ukraine, is being hit hard by the ongoing strike by workers at Transnet.
United National Transport Union (UNTU) members started the strike last week and South African Transport and Allied Workers’ Union (Satawu) members joined the strike on Monday.
Transnet said in a statement yesterday that it had concluded the first day of conciliation talks with the unions facilitated by the Commission for Conciliation, Mediation and Arbitration (CCMA), in the early hours.
“The parties have agreed and signed on the picketing rules and picketing sites, and remain willing to find a solution on the wage negotiations. The parties to the negotiations are considering alternative proposals and will reconvene on Wednesday, 12 October, 2022 to take the process forward.”
Experts yesterday said that the strike would have a significant impact on the import and export industry, especially coal exports.
Chris Yelland, an independent energy analyst, said South Africa was one of the biggest exporters of coal in the world and the strike was causing major disruptions to this.
“There will be a massive impact on the economy of South Africa and the GDP. We also have to remember that mining companies will start taking a major knock. The coal industry is already under pressure with the rail industry having so many problems, so already coal movement was affected and this will only add to the industry’s woes.”
Yelland said that the strike would stop the movement of coal in its tracks.
“The trucking industry is also impacted by the strike. How do they deliver coal to Richards Bay when all the ports are closed? There is massive traffic congestion because of the ports not being operational. The coal industry will suffer more because trucks are also not able to transport coal.”
Ted Blom, another energy analyst, agreed that the strike would have a debilitating impact on the coal and mining industry.
“This situation needs to be resolved as soon as possible. Mining companies will be impacted and will incur massive losses. Remember, if mining companies can’t reach a target of 10% of exports, already that will be a major issue. When a mining company loses business, as in this case in the coal industry, the fact is that there is no coming back for those businesses.”
Dr Sanele Gumede, an economics lecturer at the University of KwaZulu-Natal, said that in terms of volumes, South Africa was one of the three major exporters of coal in the world.
“Obviously, not being able to export coal is going to have a major impact in South Africa. Remember, South Africa benefited from the Russia and Ukraine crisis in terms of coal exports and now with the Transnet strike could possibly lose all this business.
“If companies that are exporting from South Africa can’t get coal from here they will look to other countries to export coal and (this) will result in South Africa losing coal export contracts.”
Gumede said that the future of coal was not looking good and the sector needed to capitalise while it still could.
“Many parts of the world are turning to renewable energy and we need to cash in while we still can.
“This strike will only put more pressure on our economy and increase the suffering of exports in South Africa. In Richards Bay, the export of coal is being hampered by conveyor belt outages and now the strike will further impact the export of coal. The economic impact of the Transnet strike is estimated to cost the industry up to R1 billion a day, however, the broader picture is that with the ports not being operational the impact of the strike will be even more than that.”
Melanie Veness, CEO of the Pietermaritzburg and Midlands Chamber of Business, said that the Transnet strike was catastrophic for the already limping economy.
“Supply chain interruptions will negatively impact production. Mineral exports will be hard hit. The disruption of imports and exports right before the start of the Christmas season is disastrous for trade and for retailers. Very few South Africans will be untouched by this,” Veness said.
“Government needs to resolve this issue quickly and steps must be taken to ensure that the country does not find itself in this kind of a position again.”