Bad to worse for one of South Africa’s biggest employers
The closure of the Lebombo border post, one of South Africa’s critical export routes into Mozambique, is another blow to the nation’s already embattled mining industry.
The shutdown follows violent protests in Mozambique related to the recent elections, which have sparked widespread unrest in the southeastern African nation.
This disruption has effectively severed a vital export corridor, costing South Africa’s mining sector millions of rands daily as shipments of key minerals, including coal, chrome, and magnetite, remain stranded at the border.
With Mozambique’s Maputo port—a major hub for South African chrome exports—now closed to cargo, hundreds of trucks that would ordinarily carry these resources to market are stalled, incurring severe financial losses.
The port’s operator, Maputo Port Development Co., announced its decision to halt cargo reception in coordination with customs and Mozambican border authorities, citing security concerns.
As a result, an estimated R1,000 is lost per truck for every hour of delay, pushing the cost of this closure into millions per day.
The situation has exposed the vulnerability of South Africa’s mining logistics, especially at a time when the national logistics provider, Transnet, is struggling with inefficiencies that have driven some companies to seek alternative routes, such as through Maputo.
The unrest stems from Mozambique’s October 9 elections, which extended the ruling party’s long-standing power.
The opposition has rejected the results, alleging electoral fraud, which has intensified tensions and led to clashes, including the torching of vehicles near the border.
South African authorities responded by closing the Lebombo border post, leaving the trucks bound for Maputo stranded, and forcing Mozambican government officials fleeing the unrest to seek refuge in South Africa.
According to Barbara Mommen of the Southern African Association of Freight Forwarders’ N4 Corridor working group, the disruption is dire for both Mozambique’s and South Africa’s economies, especially as it impedes mineral exports that South Africa relies on heavily.
For South Africa’s mining sector, the border closure comes as yet another setback in an industry already struggling with volatile labour relations, regulatory uncertainties, and organised crime.
The sector, once the backbone of South Africa’s economy, still supports approximately 477,000 jobs and contributes substantial tax revenue, yet faces diminishing profitability due to stagnant commodity prices and high operational costs.
Prominent mining companies, especially those involved in platinum group metals (PGM), coal, and diamond mining, are under increasing financial pressure.
S&P Global recently highlighted the challenges facing these firms, noting that prolonged low demand and prices have driven companies like Sibanye Stillwater to cut over 11,000 jobs since 2023, with the potential for more reductions should operational issues persist.
Impala Platinum’s CEO, Nico Muller, has warned that substantial cost reductions are needed to avoid further restructuring or potential closure.
While these companies have managed to sustain their financial health thanks to relatively low debt levels, rising costs due to investments in stabilising failing logistical infrastructure, such as Transnet, are shrinking the resources available for growth or expansion.
The border post-closure has underscored the fragility of South Africa’s mineral supply chain at a time when it can least afford disruptions.
As the mining sector grapples with these compounded challenges, the situation at the Lebombo border exemplifies how external political unrest can have immediate and costly repercussions for an industry that, while still central to South Africa’s economy, is increasingly struggling to remain viable in a shifting global market.
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