South Africa Logistics Reset: Transnet, the GNU, and the 2026 Recovery Path

The Transnet baseline: a six year volume collapse and a partial 2024 inflection #

Transnet Freight Rail (TFR) is the spine of South African export logistics. It carries iron ore from the Northern Cape, coal from Mpumalanga, manganese from the Kalahari basin, and intermodal freight on the Natal corridor. The Transnet Integrated Annual Report for fiscal 2024 recorded total rail freight volumes of 151.7 million tonnes, against 149.5 million tonnes in fiscal 2023, 173.0 million tonnes in fiscal 2022, and 226.3 million tonnes in fiscal 2018. Locomotive availability fell to 51 percent in fiscal 2023 on the back of the 2021 cyber attack and the stalled CRRC and Bombardier locomotive contract dispute. Copper cable theft incidents crossed 1,500 events per quarter at the 2023 peak.

The fiscal 2024 stabilisation reflects the December 2023 Freight Logistics Roadmap from the National Treasury and Department of Public Enterprises. It also reflects the appointment of Michelle Phillips as Group CEO and the unbundling of TFR into Transnet Freight Rail Operating Company (TFROC) and the infrastructure manager. The Transnet Network Statement issued in March 2024 set out the technical, operational, and tariff framework for third party access, the first published access document benchmarked to the European model. By Q1 2026 Transnet had received 11 binding slot applications from private operators on the coal, manganese, and intermodal corridors. First commercial trains are scheduled for the second half of 2026 on the manganese line.

The Government of National Unity and the Operation Vulindlela continuity question #

The 29 May 2024 general election ended thirty years of single party majority rule. The African National Congress polled 40.18 percent of the national ballot, down from 57.50 percent in 2019, the Democratic Alliance 21.81 percent, the MK Party 14.58 percent, and the Economic Freedom Fighters 9.52 percent. President Cyril Ramaphosa was re-elected on 14 June 2024 by a National Assembly coalition that became the Government of National Unity, comprising the ANC, DA, IFP, PA, GOOD, PAC, FF Plus, UDM, Rise Mzansi, and Al Jama-ah. The Statement of Intent signed by the GNU partners committed to fiscal consolidation, Eskom and Transnet reform, and continuity of the Operation Vulindlela structural reform unit hosted jointly in the Presidency and National Treasury.

Operation Vulindlela Phase II, launched in May 2024, retained the original four work streams (energy, logistics, water, visa and skills), added local government and digital public infrastructure, and named the National Logistics Crisis Committee as the accountable structure for freight reform. The DA's control of Public Works and Infrastructure under Minister Dean Macpherson, and the migration of the rail reform mandate to the Department of Transport under Barbara Creecy, has not produced the policy fracture markets priced in June 2024. The ZAR appreciated from 18.92 per dollar on election day to 17.84 by year end 2024 and 17.62 by April 2026 on Reuters Johannesburg fixings. The risk to continuity is the 2026 local government cycle and the MK Party's constitutional challenges to coalition formation in KwaZulu-Natal.

Iron ore on Sishen to Saldanha and coal on Richards Bay: the corridor underperformance #

The Sishen to Saldanha Iron Ore Export Channel is the longest heavy haul corridor in Africa, 861 kilometres of mostly single track, designed for 342 wagon trains at 30,000 tonne payloads. Anglo American Kumba and Assmang together account for the entire railed iron ore tonnage out of the Northern Cape. Kumba's 2024 results disclosed sales of 36.6 million tonnes against production of 35.7 million tonnes, with the gap closed from finished stockpiles. The corridor moved 50.4 million tonnes in TFR fiscal 2024 against the 60 million tonne nameplate, and Kumba's guidance to fiscal 2027 holds at 35 to 37 million tonnes pending TFR reliability. Saldanha port ran at 96 percent berth utilisation through 2024 and 2025, indicating the binding constraint is rail, not port handling.

The Richards Bay coal corridor, 580 kilometres from the Mpumalanga collieries to RBCT, has the steepest performance gap. RBCT design capacity is 91 million tonnes per annum. Throughput in 2017 was 76.5 million tonnes, in 2023 was 47.0 million tonnes, the lowest reading since 1993, and in 2024 was 52.0 million tonnes per RBCT and Minerals Council South Africa releases. Thungela, Exxaro, Glencore, Seriti, and South32 collectively absorbed roughly 1.8 billion dollars of forgone export revenue in 2023 at then prevailing API4 prices near 120 dollars per tonne. South32's South Africa Energy Coal divestiture in 2021 to Seriti is now framed in retrospect as a correctly timed exit, while South32 manganese concentrate from Hotazel faces the same TFR constraint as iron ore.

The third party access regime under the 2022 National Rail Policy is the structural answer. Cabinet approved the policy in March 2022, and the Transport Minister gazetted the implementation framework in December 2023. The Transnet Network Statement of March 2024 set out access charges, slot allocation rules, and an independent dispute resolution process administered by the Interim Rail Economic Regulatory Capacity. By April 2026 the Department of Transport was finalising the Rail Economic Regulator legislation. The Minerals Council South Africa estimated that 20 million tonnes of additional throughput per year was achievable by 2027 if private operators captured even a third of the available slots.

Eskom recovery: load shedding decline, the EAF rebuild, and the 2030 capacity question #

Eskom's operational performance has been the single largest macro tailwind to the economy in 2024 and 2025. The utility imposed 332 days of load shedding in 2023 (CSIR), with 280 hours at Stage 6, and the Energy Availability Factor (EAF) averaged 54.7 percent for the financial year. By the Eskom System Status Bulletin of December 2024, year on year load shedding hours fell roughly 92 percent. From 26 March 2024 the country went 11 consecutive months without daytime load shedding outside isolated maintenance events. The EAF reached 65.2 percent on a rolling year basis through Q1 2026, against the 65 percent Generation Recovery Plan target.

The drivers are the return to service of Kusile Units 1, 2, 3, and 5 after the November 2022 flue gas duct collapse, planned maintenance discipline at Medupi and Tutuka, and 6.2 GW of registered private generation behind the meter under the August 2023 Schedule 2 amendments. NERSA's registered embedded generation pipeline crossed 12.4 GW by Q1 2026, dominated by mining and industrial self-supply solar PV with battery storage. Stage 6 has not been imposed since March 2024. The IRP 2023, published in January 2024, targets a 2030 mix of 6 GW new wind, 6 GW new solar PV, 3 GW gas to power, and 2.5 GW battery storage. The reform not yet delivered is the legal separation of the National Transmission Company South Africa: the Electricity Regulation Amendment Act of August 2024 created the basis, but operational unbundling slipped from December 2024 to a target of December 2026.

FATF gray list exit, the rand, and the SARB rate path #

South Africa entered the FATF gray list on 24 February 2023 on 22 strategic deficiencies in the AML and CFT framework. By the October 2025 plenary in Paris the country had cleared all 22 action items, and on 24 October 2025 the FATF removed South Africa from the list. The compliance work, coordinated by the Financial Intelligence Centre, the SARB Prudential Authority, and the Hawks, raised suspicious transaction reports by 38 percent between 2023 and 2025 and produced a sevenfold increase in beneficial ownership disclosures in the CIPC registry. The exit removed an estimated 25 to 50 basis point spread component on sovereign issuance, on National Treasury estimates.

The SARB Monetary Policy Committee began its cutting cycle in September 2024, taking the repo rate from 8.25 to 8.00 percent, with subsequent 25 basis point cuts in November 2024 and January 2025 that left the repo at 7.75 percent and the prime lending rate at 11.25 percent by Q1 2026. Headline CPI registered 2.8 percent year on year in March 2025, the lowest since 2020, before stabilising in the 3.2 to 3.6 percent corridor through Q1 2026, inside the 3 to 6 percent target band and below the 4.5 percent midpoint that the Governor has signalled is the operational anchor. The ZAR traded at 18.45 per dollar on the day of the FATF exit announcement, and 17.62 per dollar and 19.95 per euro on 25 April 2026. The implied forward path carries one further 25 basis point cut in 2026 and a terminal repo near 7.50 percent.

The 2026 outlook: corridor recovery, Sasol's 2030 cap, and the binding execution risks #

The base case for fiscal 2026 is TFR throughput of 162 million tonnes, with an upside of 170 million if private access on the manganese and intermodal corridors comes online before the second half. Anglo American Kumba guided to 35 to 37 million tonnes in 2026 on the assumption of a steady Sishen to Saldanha service above 50 million tonnes. The Richards Bay recovery is more contingent: Thungela reset its 2026 South African production guidance to 12.6 to 13.6 million tonnes against 11.6 million in 2024. The demand outlook is the deeper issue: API4 coal prices fell from a 2022 peak of 444 dollars per tonne to roughly 105 dollars in Q1 2026, and South African exports increasingly rely on India, Pakistan, and Vietnam rather than the pre 2022 European trade.

Sasol Ltd remains the single largest emitter in the country, with 60 million tonnes of CO2 equivalent in fiscal 2024 from Secunda and Sasolburg. The 2030 emissions cap negotiated with the Department of Forestry, Fisheries and the Environment under the 2024 atmospheric emission license amendments holds at 51 million tonnes for Secunda. The glide path is linked to natural gas substitution from Mozambique and Pande Temane field exhaustion in the late 2020s. Sasol's January 2026 update to the Just Energy Transition Investment Plan committed 6 billion rand to renewable PPAs by 2030 and deferred the 2050 net zero pathway to a 2035 to 2040 horizon for green hydrogen at scale.

Binding execution risks cluster in three areas. First, the Transnet balance sheet carries 132 billion rand of debt, and the 47 billion rand National Treasury equity injection of October 2023 plus the 51 billion rand guarantee cover near term redemptions but not the 2027 to 2029 wall. Second, the Rail Economic Regulator legislation has to pass the National Council of Provinces and survive GNU coalition arithmetic before the 2026 local elections. Third, the Eskom unbundling has to deliver operational separation of NTCSA on schedule for 2026 to 2027 procurement to clear. Argus and Hercules platform readers will recognise the pattern: the policy stack is correct, the data is in the public domain through the Network Statement and IRP 2023, and the residual risk is delivery, not design.

Sources #

• Transnet SOC Ltd, Integrated Annual Report 2024
• Transnet Network Statement, March 2024 (Department of Transport)
• Department of Transport, National Rail Policy White Paper 2022
• National Treasury, Operation Vulindlela Phase II, May 2024
• South African Reserve Bank, MPC Statements 2024 and 2025
• NERSA Monitoring of the Renewable Energy Sources, 2025 Q1 update
• Eskom System Status Bulletin and Generation Recovery Plan, 2024 to 2025
• Statistics South Africa, P0141 CPI release, March 2026
• Anglo American Kumba Iron Ore, 2024 Annual Results
• Richards Bay Coal Terminal annual throughput releases, 2018 to 2024
• FATF Plenary Outcomes, October 2025 (Paris)
• Minerals Council South Africa, Facts and Figures 2024 and Logistics Update Q1 2026