Laura Franz Mining Weekly Features Reporter With the July
coal-price index at its lowest in 18 months, difficulties in the
South African coal industry continue to be magnified, reports
Department of Minerals and Energy chief mineral economist: coal and
hydrocarbons Xavier Prevost.
As a result of this situation, only two local coal-mines, Total Exploration South Africa’s Dorstfontein mine and Kuyasa’s Ikhwezi mine, have gone ahead with their plans to increase production since Mining Weekly last spoke with him in June, continues Prevost.
On the other hand, a number of mines are contemplating production cuts.
“We can also anticipate a negative export forecast for the immediate future, with a surplus of steamcoal in the international market, probably until 2003, as reported by London-based analyst Primark Wefa in the International Steam Coal Trade & Price Forecast, 1999.
“If local export trends continue, we can expect a 4%, or 2,7-million ton, drop in exports at the end of this year, to 64,4-million tons, compared to the 1998 year-end figure of 67-million tons.
“The Asian market seems to represent the only possibility for increasing our coal export at present,” notes Prevost.
Although the trend in the industry has been the migration of large conglomerates to international markets, the more immediate trend is to wards changes in mining policy and a focus on higher-quality products.
The most visible changes in the South African coal industry, adds Prevost, appear to be on the small coal-mining company scene.
“A large number of small coal producers – with 20-million tons to 30-million tons of on-site reserves – will be coming into the picture in the near future.
“The establishment of the Independent Small Coal Producers’ Association (ISCPA) aims to give these small producers the chance of reaching the export market, too.
“The new, and some existing, small-scale coal producers, which are mining from residues of larger coal blocks scattered across the central basin of South Africa, have only just come together to form the ISCPA,” explains Prevost.
These producers have joined forces mainly to secure port facilities and share the resulting cost implications.
“The Richards Bay Coal Terminal is already operating at maximum capacity, and transporting coal to the ports of Durban and Maputo, and then still shipping it out to the relevant markets, would simply prove too expensive,” argues Prevost.
“If the proposed South Dunes Coal Terminal begins now, it would only export in the year 2002, and could therefore also be a long-term solution for small coal producers.
“Although coal-production increases from this source are not expected soon, some of the financially-sound small producers are already showing promise,” comments Prevost.
He suggests that this tendency towards the mining of smaller blocks of coal indicates dwindling mineable coal reserves in the Witbank coalfield in Mpumalanga, among others.
One glimmer of hope on the horizon exists in the form of the sizeable Waterberg coalfield.
This coalfield, situated next to Elisras in the Northern Province, and close to the Botswana border, consists of about 4,13-billion tons of low-quality recoverable coal (see page 18).
Full costs for exploiting this reserve are high at this point due to the lack of a comprehensive infrastructure and low coal prices at present.
“While we wait for the full reassessment of the national coal reserves to be conducted by the Council of Geoscience, the assessment of the remaining reserves existing in or around mined-out areas, as put forward by CSIR Miningtek’s Coaltech 2020 programme, could become useful to the industry,” says Prevost.
Mining methods have improved with time, and another way to extend a mine’s life is to recover the underground pillars of defunct mines or areas of mines, and to process coal-mine discards.
Due to increased pressure to reduce emissions from fossil-fuel combustion, it is also becoming increasingly important for South Africa to investigate ways of reducing these emissions.
A new set of technologies, called clean-coal technologies (CCTs), offers the prospect of improving the efficiency and environmental performance of coal-use, thereby extending finite fossil fuel resources; reducing global, regional and local air pollution; and improving the economics of energy supply.
“CCTs are not just about one discipline, but encompass the domestic, industrial, chemical, metallurgical and power-generating markets.
“Their aim is to improve the environmental performance of coal combustion in industry.
“In the end, the most effective way of cleaning up coal’s dirty image will be to reduce its contribution to air, water and ground pollution,” says Prevost.
As a result of this situation, only two local coal-mines, Total Exploration South Africa’s Dorstfontein mine and Kuyasa’s Ikhwezi mine, have gone ahead with their plans to increase production since Mining Weekly last spoke with him in June, continues Prevost.
On the other hand, a number of mines are contemplating production cuts.
“We can also anticipate a negative export forecast for the immediate future, with a surplus of steamcoal in the international market, probably until 2003, as reported by London-based analyst Primark Wefa in the International Steam Coal Trade & Price Forecast, 1999.
“If local export trends continue, we can expect a 4%, or 2,7-million ton, drop in exports at the end of this year, to 64,4-million tons, compared to the 1998 year-end figure of 67-million tons.
“The Asian market seems to represent the only possibility for increasing our coal export at present,” notes Prevost.
Although the trend in the industry has been the migration of large conglomerates to international markets, the more immediate trend is to wards changes in mining policy and a focus on higher-quality products.
The most visible changes in the South African coal industry, adds Prevost, appear to be on the small coal-mining company scene.
“A large number of small coal producers – with 20-million tons to 30-million tons of on-site reserves – will be coming into the picture in the near future.
“The establishment of the Independent Small Coal Producers’ Association (ISCPA) aims to give these small producers the chance of reaching the export market, too.
“The new, and some existing, small-scale coal producers, which are mining from residues of larger coal blocks scattered across the central basin of South Africa, have only just come together to form the ISCPA,” explains Prevost.
These producers have joined forces mainly to secure port facilities and share the resulting cost implications.
“The Richards Bay Coal Terminal is already operating at maximum capacity, and transporting coal to the ports of Durban and Maputo, and then still shipping it out to the relevant markets, would simply prove too expensive,” argues Prevost.
“If the proposed South Dunes Coal Terminal begins now, it would only export in the year 2002, and could therefore also be a long-term solution for small coal producers.
“Although coal-production increases from this source are not expected soon, some of the financially-sound small producers are already showing promise,” comments Prevost.
He suggests that this tendency towards the mining of smaller blocks of coal indicates dwindling mineable coal reserves in the Witbank coalfield in Mpumalanga, among others.
One glimmer of hope on the horizon exists in the form of the sizeable Waterberg coalfield.
This coalfield, situated next to Elisras in the Northern Province, and close to the Botswana border, consists of about 4,13-billion tons of low-quality recoverable coal (see page 18).
Full costs for exploiting this reserve are high at this point due to the lack of a comprehensive infrastructure and low coal prices at present.
“While we wait for the full reassessment of the national coal reserves to be conducted by the Council of Geoscience, the assessment of the remaining reserves existing in or around mined-out areas, as put forward by CSIR Miningtek’s Coaltech 2020 programme, could become useful to the industry,” says Prevost.
Mining methods have improved with time, and another way to extend a mine’s life is to recover the underground pillars of defunct mines or areas of mines, and to process coal-mine discards.
Due to increased pressure to reduce emissions from fossil-fuel combustion, it is also becoming increasingly important for South Africa to investigate ways of reducing these emissions.
A new set of technologies, called clean-coal technologies (CCTs), offers the prospect of improving the efficiency and environmental performance of coal-use, thereby extending finite fossil fuel resources; reducing global, regional and local air pollution; and improving the economics of energy supply.
“CCTs are not just about one discipline, but encompass the domestic, industrial, chemical, metallurgical and power-generating markets.
“Their aim is to improve the environmental performance of coal combustion in industry.
“In the end, the most effective way of cleaning up coal’s dirty image will be to reduce its contribution to air, water and ground pollution,” says Prevost.
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