Hauling manganese by road costs 37% more than rail. That single figure explains why Exxaro Resources, one of South Africa’s largest miners, is pushing hard to shift its newly acquired manganese exports onto trains.

Exxaro’s $645M manganese bet hinges on rail, where costs run [37%] lower than road and transport already eats 43% of the mineral’s value.



Exxaro’s move is not about convenience. It’s about survival in a sector where logistics can swallow nearly half the value of the mineral before it even leaves the country. The company revealed that transport accounts for 43% of the free‑on‑board cost of manganese, a bulk mineral critical to both steelmaking and the fast‑growing battery industry. When margins are tight, that percentage is brutal.

The company’s head of metals, Johan Meyer, told analysts plainly: “We need to make sure that we have a strategy long term to say, can we not put everything on the rail?” His words carry weight because Exxaro has just spent 10.6 billion rand ($645.7 million) diversifying away from coal into manganese. The centerpiece of that deal is the Tshipi Borwa mine, which alone produces 3.5 million metric tons of manganese annually, most of it bound for China. Right now, nearly half of that output—46%—still travels by truck to port.

The reliance on trucks is not a choice Exxaro wants to make. South Africa holds 80% of the world’s manganese reserves and supplies 42% of global exports. Yet the country’s state‑owned freight operator, Transnet, has struggled for years with under‑investment, cable theft, and vandalism. Those failures have throttled mineral exports, forcing miners to either cut production or pay the premium for road haulage. Exxaro’s plan is to work directly with Transnet, which is opening parts of its network to private investment, to expand rail capacity.

Ben Magara, Exxaro’s chief executive, framed the issue as both a cost problem and an efficiency problem. Rail is not just cheaper; it’s more reliable when infrastructure is maintained. For a company betting its future on manganese, reliability matters as much as price. Manganese’s role in steel is well established, but its growing use in batteries—particularly for renewable energy storage—makes it a mineral of the energy transition. Exxaro is positioning itself to ride that wave, but only if it can move its product efficiently.

The numbers tell the story. A 37% cost gap between road and rail. A logistics burden equal to nearly half the mineral’s value. A mine producing millions of tons a year, with almost half still stuck on trucks. Each figure points to the same conclusion: without rail, South Africa’s manganese advantage risks being undermined by its own infrastructure.

The broader implication is clear. If Transnet succeeds in opening its network to private capital and improving performance, South Africa could unlock far greater value from its mineral wealth. If it fails, miners like Exxaro will keep paying the road premium, and the country’s dominance in manganese could erode under the weight of its own inefficiencies. For now, Exxaro is betting that rail will deliver—not just cheaper transport, but the backbone of its diversification strategy.

Sources: Reuters, MSN, Kitco News