 CAPE TOWN (miningweekly.com) – South Africa's coal industry needed to ready itself for the next coal boom, which would undoubtedly occur, Anglo Coal South Africa CEO Ben Magara said on Thursday.
Magara told McCloskey's South African Coal Conference in Cape Town that South African coal supplies were "in no way endless" and that all coal companies must collectively attack strategic issues in order to ensure that it did not lose out on the next boom, as it had lost out on the one just past.
He said that all South African coal miners were still digging in the depleting Witbank coalfield and that the migration to the Waterberg coalfield had been "very slow".
Zimbabwe mining engineering graduate Magara said that South Africa was currently "severely challenged", just to maintain the current level of supply, let alone grow it.
The best Witbank deposits had already been mined and future generations could condemn this generation's handling of South Africa's coal business.
South Africa did have vast coal resources, but turning those new areas to account required serious and ongoing commitment.
"We have to see beyond the crisis. Exploration takes a few years and requires major funding," he said.
To turn every million tons a year to account currently cost R500-million and the returns were not rapid.
This required comprehensive alignment between all coal producer and stakeholders.
"We need to think about a different model in attacking all the strategic issues that had to be solved for the industry to be taken to another level in search of a liftoff.
"We have built the building blocks, which require resources, which we have, and equipment, and we all buy from the same kind of suppliers.
"The means of delivery through roads, rail and ports needed to have the required capacity.
"Obstacles to entry needed to be minimised in order to be able to act.
"We are all stuck in Witbank and all busy in the same place, which is depleting, and the jury is still out on just how good the Waterberg resources really are," Magara said.
This year's mining legislation review opportunity must be grasped.
The industry needed to ensure that it was never part of unintended consequences again.
The war for skills and talent was over. The employees had won. The industry should ensure that it never had to play musical chairs again.
Equipment was becoming more complex and equipment costs were escalating.
It was doubtful whether sufficient commitment had been placed on ensuring the expansion of the Richards Bay Coal Terminal.
Big producers, with entitlements, left it to the juniors, and failed to benefit fully from the boom. The juniors tended to lean on political connections to assist them.
Engagement with government had been inadequate and government's role was unclear.
Customers could be accused of leaning for too long on the spot market and better coordination was needed.
The industry might have been too afraid to "rock the boat" in its engagement with government and a 100-year outlook on the legislation should be developed.
There had been an impact on South Africa's competitiveness and South Africa had not taken full advantage of the last coal boom.
The issues needed to be swept aside and it was urgent to be ready for the next boom, which would come.
The coal industry was South Africa's third-largest generator of foreign exchange and needed to be aware of how future generations would judge management.
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