Prices for the fuel were now beginning to stabilise, and would not drop dramatically by the end of the year, he told Mining Weekly Online.
Newswire Bloomberg reported on Monday that the price of coal exported from South Africa’s Richards Bay Coal Terminal fell 12% to $148,15/t in the week ended July 25, citing McCloskey Group figures.
Asked if he believed that the growing negative sentiment globally towards coal-fired power generation would dampen the sector’s prospects, Prevost said he did not think so.
“Even with the new regulations, the coal sector still has a great future,” he said in a telephone interview.
In South Africa, Environmental Affairs and Tourism Minister Marthinus van Schalkwyk last week confirmed that the government would approve no future coal-fired power stations or coal-to-liquids facilities, unless it could be shown that the development was carbon-capture and storage ready.
Coal consumption was set to increase in the country, as Eskom moved to build at least two new base-load coal-fired power stations, leading to increased local prices for the fuel, and, in turn, higher power prices.
“That’s a fact that we are going to have to live with,” Prevost commented.
However, it was not plain sailing for the local coal-mining sector.
Prevost said that factors including insufficient rail capacities and the sluggish processing of mining licences by the State were holding back the industry.
He commented that the government-owned rail utility, Transnet Freight Rail, had been “lagging behind on purpose”, as it wanted the mining companies to be operating and producing before it spent capital on extra rail capacity. This had become a contentious issue during past months.
And, while new mining legislation that placed South Africa’s minerals under the custodianship of the State had helped to free up resources that might not have been developed, government took too long to process mining right applications, costing these companies money.
On receiving the 2008 Annual Prestige award, which goes to people who have “made major contributions during their professional lives to the coal and fossil fuel industry”, Prevost thanked the specialists that had helped him with his work.
He said that all the expertise and knowledge he possessed was partly his own, but that much of it had come from those that had assisted him.
There were many different fields of expertise in the coal sector, including geology, mineability, beneficiation, logistics, and, “most important of all”, coal marketing, detailed Prevost.
And each of these areas of expertise required an expert.
The awards function was held in Johannesburg.
Before joining Wood Mackenzie, Prevost had worked for the Department of Minerals and Energy, where he was the chief mineral economist.