He maintains that, based on the 1983 FSJ de Jager report, the country's coal reserves estimate updated for the end of 2001 was 34,4-billion tons.
Given the present rate of output (about 297- million tons a year run-of-mine), and expecting yearly growth in production, in 40 years, only 20% of these reserves will remain, most likely as unmineable coal left in the ground due to mining or geological constraints.
Coal reserves differ from coalfield to coalfield, in rank, type and quality and once the Central Basin (Witbank, Highveld, Ermelo, northern Kwazulu-Natal) reserves are mined out, some of the best coal for export and local use will come to an end.
The overall quality of South Africa's reserves is of relatively low grade with a high ash content, and most coal-processing technologies used are state-of-the-art, geared to make efficient use of the coal.
Some of Eskom's and Sasol's coal-to-liquids and chemicals plants use mainly 'raw' coal as feedstock, while supply to the metallurgical local market, the industrial small boiler sector and some 'merchant' or household markets are washed to improve quality.
These users together comprise only about 10% of the total domestic market of 155-million tons a year.
The demand for high-grade beneficiated coal on the South African domestic market is, therefore, limited. The main problem facing the country is the sustainability of coal exports.
South Africa exports 30% of its yearly saleable output of 226-million tons.
Uncertainty exists around the amount of suitable reserves that can be processed to sustain this rate.
Some large export collieries in the Witbank and Ermelo coalfields, from which most exports originate, have reached mid-life and there is limited availability of large blocks of coal reserves for future exports. The concern around the availability of significant quantities of economically-extractable coal reserves for future use is linked to the country's expected dependence on coal well into the foreseeable future.
"Therefore, it is imperative that the national coal resource and reserve base be evaluated in order to assist government in formulating an efficient energy policy with regard to future energy supply," says Prevost.
The Department of Minerals and Energy (DME) has initiated a process to re-evaluate the national coal resource status, which will be known as the National Inventory of Coal Resources. Last year, coal-mining and beneficiation processes resulted in the generation of about 74-million tons of discards.
Although generally of poor quality, because of the carbon presence in them, they could become a future energy source. It is estimated that more than a billion tons of this material has already accumulated on and around coal-mines, and new projects in South Africa, such as fluidised bed combustion, could be used to take advantage of these discards.
Other new projects in the local coal industry include the Usutu coal project; and the Kriel south project. As a result of the mothballing of Camden power station, the mining operations at the Usutu colliery ceased. Since the power station will only return to service by 2009, a joint venture between Anker Coal, Mineral Holdings SA and Eskom Enterprises is evaluating the best-use scenarios for the remaining reserves in the colliery.
The coal reserves to be exploited in this project amount to 200-million tons. The mining plan consists of six mines. The operations are to begin as a result of the Richards Bay coal terminal expansion.
A joint venture has been initiated between Sasol and Anglo Coal to carry out a feasibility study on the exploitation of about 200-million tons of Anglo Coal's Kriel South coal reserves, situated adjacent to Sasol's Syferfontein opencast mine.
The total production of ten-million tons a year from the two mines will be supplied to the Sasol plants in Secunda over 20 years. Furthermore, it is envisaged that all the coal gasification activities at Sasol in Sasolburg will be phased out by 2004, with only a small amount of coal being used for steam and power generation.
The replacement of coal by natural gas as a feedstock for some Sasol plants may lead to an increase in the lifespan of the coal reserves.
"The past few years have not produced any significant large new coal developments, apart from the Kriel South and Usutu project," says Prevost.
New entrepreneurs are actively looking for reserves to open collieries, but existing reserves are not easily accessible because of the lack of information about them.
One of the prerequisites to opening a new mine is that it has a local market, with, if at all possible, a lighter fraction of coal for exports. Coal exports are, for now, only available to big producers, with some exceptions, given the constraints of quality and infrastructure required to enter this market.
With the expansion at the Richards Bay coal terminal, this situation may change, if allocations given to independent mines are convenient to all, port costs are affordable and extra capacity is enough to accommodate all newcomers.
Prevost believes that reserves and demand are sufficient to increase exports to 82-million tons or 84-million tons a year.
"If other countries, such as Colombia and China, can increase their share in the world market, South Africa can do likewise," he comments.
The idea that withholding increases in production to keep prices high is na