Great article! Yes, I know it's about South Africa, but it's certainly relevant.
JOHANNESBURG (miningweekly.com) - An investment of between R90-billion and R110-billion may be required to build the 40 new coal mines that are expected to be required for the South African industry to meet the projected growth in domestic and export demand over the next decade, a new research note forecasts.
“South Africa’s energy intensive economy is overwhelmingly dependent on coal,” Frost & Sullivan metals and mining analyst Wonder Nyanjowa wrote, adding that coal underpinned about 75% of the country’s power and transport energy needs and supported 90% of the electricity generated.
State-owned power utility Eskom, was expanding its power generation capacity by building new power stations and returning into service three power plants that would increase its coal consumption needs by an additional 50-million tons a year.
The expansion of Sasol’s synthetic fuels manufacturing capacity would also see its coal consumption rising by an additional 25-million tons a year.
“In other words, the domestic demand for coal is set to increase by 75 million tones per year over the next decade. Export demand for coal from China, India and the European Union is also forecasted to remain strong.”
The existing coal production capacity of the country could not sustain this growth.
Since 2003, South Africa’s coal production has remained stagnant at levels around 240-million tons a year, only posting small incremental changes at best.
Depleted coal mines in the Witbank, Ermelo and Highveld coalfields in the Mpumalanga province, together with the operational and technological constraints that coal miners have been facing, account for the stagnation of coal production.
Industry sources indicated that most of the existing coal mines in the Mpumalanga province would be exhausted by 2020, whilse two collieries in KwaZulu-Natal have already closed.
“Frost & Sullivan forecasts coal supply to remain flat in the short to medium term, owing to long lead periods between exploration and commissioning of new mines,” Nyanjowa said.
“The Waterberg coalfield in the Limpopo province hosts about 50% of the country’s coal reserves and it has one colliery operated by Exxaro Resources. Other coal miners such as Anglo Coal and BHP Billiton Energy are still prospecting in the area.”
The Waterberg coalfield already has two coal-fired power stations attached to it and it represents the future of coal mining and electricity generation in the country.
However, Frost and Sullivan stated that further developments would be needed to ensure that the drive to meet the country’s energy requirements are not constrained by an insufficient coal supply.
Edited by: Terence Creamer