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SA has the potential to become future coking-coal producer
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15th March 2013
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While South Africa is currently producing limited coking coal, far more significant coking-coal production is expected within the next five years, states minerals industry consultancy Venmyn Deloitte director Neil McKenna.

A growing market for this fuelling coal is expected internationally, as iron and steel production is expected to increase on the back of growing industrialisation and urbanisation in emerging markets. “This growth should lead to increased demand for coking coal and South Africa should be able to take advantage of the increased demand rather than simply becoming a replacement supplier,” says McKenna.

He notes that South Africa has large coking-coal deposits, particularly in Limpopo, with coal miner Coal of Africa’s Vele operation, 48 km west of Messina, becoming the newest producer in South Africa.

Vele comprises an opencast coking-coal operation, McKenna notes, adding that mining company Exxaro’s Tshikondeni and Grootegeluk collieries have been the only significant South African mines to produce coking coal until now.

“However, there are currently several junior miners that are considering the development of coking-coal projects,” he points out.

He stresses that South Africa has the potential to become a leading coking- coal producer, highlighting that the coking coal resources in the Soutpansberg, in Limpopo, are recognised as high quality, with a medium- to high-volatile content and high fluidity, which means that it blends well with lower-quality coals.

“The advantage of local coking-coal production is that it reduces the need for coal imports and creates the opportunity for South Africa to become a supplier of coking coal to the local and international steel industry,” says McKenna.

In addition, South Africa will be able to increase its export potential, and possibly create a middlings fraction that is suitable as steam coal, with a long-term opportunity to combine coking-coal operations with power station feedstock.

The development of the coking-coal mines will also create significant potential for job creation in local communities, while encouraging infrastructure development and economic stimulation for other sectors of the country, McKenna highlights.

McKenna concludes that there will be significant competition in the international coking-coal market. “Australia, the US and Canada dominate seaborne coking-coal exports – a trend that will continue. Canadian and Russian coking-coal supplies are also expected to grow, as are supplies from emerging coking-coal suppliers in Africa, Indonesia and Columbia.”

Edited by: Megan Wait

 

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NEIL MCKENNA South Africa has the potential to become a leading coking-coal producer
 

NEIL MCKENNA South Africa has the potential to become a leading coking-coal producer