SA’s Traxtion bets on regional rail reforms and mineral boom

South African rail services provider Traxtion is positioning itself to profit from a regional mineral boom and sweeping reforms across the continent that are opening up freight rail networks to private firms, CEO James Holley said on Friday.

This consolidation of the open access policy across the region is a fundamental shift in the way that freight is going to move—   CEO, James Holley

Traxtion, one of Africa’s largest private freight rail operators, announced a R3.4bn rolling stock investment programme in December to expand its capacity and support rail reform in a region that exports critical minerals, including copper and lithium.

This investment includes the procurement of 46 locomotives and 920 waggons.

“The fact that we have announced this investment says everything about our confidence in the direction of travel for the rail freight sector in South Africa and in the region,” Holley said.

South Africa is opening its state-owned freight rail network to private operators through an open-access model, allowing them to run trains on state-owned infrastructure to increase capacity, efficiency and private investment in rail logistics.

Several other mineral-rich countries in which Traxtion operates, including Angola, the Democratic Republic of the Congo (DRC), Zambia, Mozambique, and Zimbabwe, are also opening up their freight rail networks to private firms, including through concessions, to boost commodity exports.

Angola has granted a 30-year concession for the strategic Lobito Corridor railway to a Trafigura-led consortium, while the DRC has awarded Mota-Engil a concession to upgrade rail infrastructure to connect DRC mines to Lobito.

The Tazara link between Tanzania and Zambia is being revamped through a $1.4bn (R22.66bn) Chinese-backed concession, while Zimbabwe is pursuing a $533m (R8.62bn) rail modernisation programme with China Railway International Group.

The fact that we have announced this investment says everything about our confidence in the direction of travel for the rail freight sector in South Africa and in the region—  CEO, James Holley

The regional rail policy environment still needs improvements to enable private operators to raise funding and to create an interconnected interstate network, to improve efficiency and lower costs, Holley said.

“This consolidation of the open access policy across the region is a fundamental shift in the way that freight is going to move,” he added.