Pan African Mining Logistics Business Plan › Section 3 › Market Analysis & Demand Drivers

3.1 Demand Architecture

The demand architecture for Southern African mining logistics is
built on five distinct layers, each of which provides a separate channel
of opportunity for PAML and which together create the diversified,
partially counter-cyclical revenue profile that underpins the Company’s
investment thesis.

3.1.1 Layer 1 — Coal Logistics

Coal remains the largest single bulk commodity in the South African
logistics mix by tonnage and revenue. Domestic thermal coal deliveries
to Eskom power stations consumed approximately 110 million tonnes per
annum in 2024, while coal exports through Richards Bay Coal Terminal
(RBCT) totalled 48.5 million tonnes (down 22% year-on-year due to rail
and port constraints). Industry forecasts indicate that, with current
Transnet recovery programmes and private rail investment such as the
Grindrod-Mining Consortium’s ZAR 2.8 billion Mpumalanga coal-line
investment, export coal volumes will recover to approximately 68 million
tonnes by 2030.

PAML’s Phase 1 strategy is anchored on capturing coal road-haulage
volumes that would historically have moved by rail. Each tonne of coal
that shifts from rail to road creates an estimated ZAR 240–320 of
incremental road logistics revenue over the typical 600 km
Mpumalanga–Richards Bay corridor.

3.1.2 Layer 2 — Iron Ore Logistics

Iron ore exports from the Northern Cape, predominantly from Sishen
and Kolomela mines, totalled 58.2 million tonnes in 2024 and are
forecast to grow to 72.5 million tonnes by 2030. The Sishen–Saldanha
rail line operates at an estimated 54% efficiency benchmark, well below
comparable Australian operations. Although iron ore is predominantly
rail-dependent, the inefficiency gap creates a sustained demand for
road-based first-mile, last-mile, and overflow services that PAML is
positioned to address.

3.1.3 Layer 3 — Manganese, Chrome, and PGM Logistics

Manganese exports (predominantly from the Kalahari Manganese Field)
reached 14.8 million tonnes in 2024, with 22.4 million tonnes forecast
by 2030. Chrome exports were 9.2 million tonnes, with 14.5 million
tonnes targeted. Both commodities are heavily dependent on a combination
of road haulage to rail-loading sites and direct road-to-port haulage.
Manganese, in particular, has experienced production growth that has
consistently outpaced logistics capacity over the past 15 years,
creating a chronic logistics-capacity shortage that PAML is structured
to address.

3.1.4 Layer 4 — Cross-Border Copper Logistics (Zambia)

The Zambian Copperbelt represents the most significant cross-border
mining logistics opportunity in the SADC region. Zambian copper exports
reached an estimated 12.5 million tonnes (cathode and concentrate) in
2024 and are projected to grow to 18.8 million tonnes by 2030, supported
by the global energy-transition demand for copper. The two principal
export corridors — through South Africa (via Beitbridge to Durban) and
through Tanzania (via Dar es Salaam) — both face significant capacity
constraints. PAML’s Phase 2 strategy (Chapter 11) targets a meaningful
share of the South African corridor.

3.1.5 Layer 5 — Mining-Supply Inbound Logistics

Beyond outbound bulk commodity flows, mining houses require
continuous inbound delivery of explosives, reagents, fuel, lubricants,
spares, and consumables. Inbound mining-supply logistics is estimated to
represent 18–22% of total mining logistics spend by value, but with
materially lower seasonal and commodity-cycle volatility than outbound
bulk haulage. PAML will pursue inbound mining-supply contracts as a
counter-cyclical revenue hedge.

Figure 3

3.2 Demand Drivers

Five primary drivers will shape mining-logistics demand over the
strategic planning horizon of this Plan:

3.3 Logistics Cost Economics for Mining Customers

Logistics costs represent a strikingly large component of total
mining production cost — between 15% and 35% depending on commodity,
mine location, and corridor. This cost structure creates two
countervailing dynamics that, together, define the market opportunity
for PAML.

First, mining customers are highly cost-sensitive in their selection
of logistics providers, particularly during periods of weak commodity
prices. This places downward pressure on logistics tariffs and rewards
operators who can deliver scale efficiencies. Second — and more
important — mining customers value reliability and contracted capacity
above marginal price differences, because logistics-driven production
losses (export cargoes missed, port slot penalties, customer take-or-pay
obligations) typically dwarf logistics tariff differentials. This
dynamic favours large, well-capitalised operators with proven contract
performance.

Figure 4

3.4 Customer Segmentation

PAML’s addressable customer universe is segmented into four distinct
tiers, each with different decision criteria, contract structures, and
margin characteristics:

3.5 Total Addressable Market

PAML’s total addressable market (TAM), serviceable available market
(SAM), and serviceable obtainable market (SOM) are estimated as follows,
with detailed derivation in Appendix B:

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