Expansion of Saldanha port may not be financially viable at this stage, says TNPA

File photo of Saldanha Terminal at Saldanha Bay harbour.

File photo of Saldanha Terminal at Saldanha Bay harbour.

Published Feb 26, 2024


The Transnet National Port Authority (TNPA) has decided to pause its proposed expansion of a stand-alone berthing facility aimed at increasing iron ore exports volumes by an additional 7 million tons at the Port of Saldanha in the Western Cape.

This comes as TNPA wanted to reposition the port by increasing exports capacity in the short-term (2022-2032) through the phase 2 iron ore expansion berth construction project.

There are two iron ore berths operational in the Port of Saldanha, with the current installed and theoretical capacity of 60 million tons per annum, respectively.

The new berth 100 was aimed to increase handling capacity to 67 million tons per annum, and more than 1.3 billion tons of iron ore have been exported through Saldanha to date.

The Port of Saldanha is the biggest iron-ore export facility in Africa and handles about 96% of iron ore export cargo per annum, originating exclusively from the Northern Cape.

In its current Ports Development Framework Plans 2022, TNPA had said the iron ore expansion project that was currently under way would contribute to the creation of additional capacity to meet the anticipated demand.

However, the Long-term Planning Framework demand forecast indicated that the iron ore terminal was currently operating at capacity and would continue to do so over the short to medium term.

Additionally, commodity exporters have experienced declining volumes, with Kumba Iron Ore reporting that ore railed to the Port of Saldanha declined by 19% in the fourth quarter of 2023 compared to the third quarter owing to multiple equipment breakdowns and adverse weather conditions.

Port manager for the Port of Saldanha and acting managing executive of the Western Region Ports, Captain Vernal Jones, said on Friday that a pre-feasibility study conducted by Transnet had shown that the expansion might not be financially viable.

“So our berth 100 for iron ore within our previous port development framework and current port development framework plans was to look at the pre-feasibility of a dedicated berth for the evacuation and export of iron ore out of Saldanha,” Jones said.

“The current work that’s being done by TNPA, with our Transnet group colleagues and other stakeholders, in validating the demand not only for the cargo itself but the financial viability that goes with the particular facility, and seeing a return of that, the current indications are that a stand-alone berth might not be what is required.”

Jones was speaking at the media briefing after TNPA held the second round of its ongoing stakeholder engagement meeting last week with port users for the Western Region ports of Cape Town, Mossel Bay and Saldanha.

In the meeting, TNPA updated stakeholders on key initiatives aimed at driving port expansion and improving operational performance.

TNPA said it was forging ahead with the reconfiguration of the oil jetty, meaning the reconfiguration of berth 104 which would enable the port to handle vessels smaller than 274 metres in length overall, and handle different white fuels.

“For the Port of Saldanha there will be the berth 104, and that is the reconfiguration of the oil jetty to look at the white fuels, a specific project that is being dealt with and being managed by TNPA and with the terminal operator, being the Strategic Fuel Fund,” Jones said.

“They have also been in possession of an LPG operating licence from Nersa (National Energy Regulator of South Africa), so there’s continued work between the two entities to see the operationalisation of that particular berth to not only handle LPG, but to also see the diversification of other fuels and white fuels through the port of Saldanha.”

Jones said they were possibly requiring about 60 to 80 metres of additional key space in the Multi-Purpose Terminal (MPT) extension in Saldanha, and the construction of berth 205, as a result of the current number of vessels trading through the port.

He said this was due to economies of scale for cargo owners to see different size vessels, in particular the 200-metre vessels through the Port of Saldanha.

“So there is quite advanced work in regard to the project, both for an MPT extension and then a completely new berth for berth 205. And synonymous with that particular naming convention was berth 205 that was under the Initiative Two of Operation Phakisa, that was meant and dedicated for the oil rig repair and the associated works there too,” Jones said.

“So that work is quite advanced by the port, led by the port engineer and the project management office, to see that particular facility come online to not only service the current demand, but also the future demand that we will require,” he said.