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S Africa’s coal mining set for growth

SUNRISE INDUSTRY South Africa is regarded as a source of a good-quality coal by European countries

SUNRISE INDUSTRY South Africa is regarded as a source of a good-quality coal by European countries

Photo by Creamer Media

16th March 2018

By: Donald Makhafola

Creamer Media Reporter

     

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Coal mining and mining in general have received a boost in confidence following the inauguration of South African President Cyril Ramaphosa who has committed to transforming mining from “a sunset to a sunrise industry”.

This is likely to solve policy uncertainty and lure investors, says London-based global initiative Bettercoal sustainability manager Irena Popa-Antohi. Bettercoal aims to address the risks in the coal supply chain.

“[Further], the biggest local energy utility, Eskom, is powered by coal, and its surplus energy is often used by South Africa’s neighbouring countries . . . The fact that coal provides about 80% of South Africa’s energy needs and ensures employment for 300 000 people makes it an indispensable resource.”

Popa-Antohi indicates that South Africa is home to 3.5% of global coal resources and, in 2016, the country was the sixth-largest coal exporter in the world, a record high.

“South Africa’s strategic geographical position accelerates connections between oceans and continents, enabling it to access markets worldwide that need its natural resources to prosper.”

While Europe recognises South Africa as a valuable source of good-quality coal for heat and electricity generation, it is reducing its footprint significantly, with many countries on the continent setting deadlines to end the use of coal for power generation. Companies are also increasingly signalling publicly the end of their involvement in coal-fired power plants.

Nevertheless, new markets are opening up for South African coal in the East, with Popa-Antohi noting that “South Africa can rest assured that its coal exports will remain high or even increase, with it starting to supply countries in Asia”.

Challenges
The Chamber of Mines’ ‘Coal Strategy for South Africa 2018’, commissioned to determine what needs to be done to increase the profile of the coal mining industry, notes that there is a challenge of water scarcity that is compounded by the lack of investment in water infrastructure, such as dams and canals.

Popa-Antohi further highlights that, in a developing economy like South Africa, the legitimacy of coal mining depends on the fulfilment of social obligations.

She adds that compliance with legislation is crucial to demonstrate that mining can have a positive impact, pointing out that “South Africa has rigorous safety and sustainability legislation and regulations, while disputes are resolved through a highly competent and fiercely independent judiciary”.

Performance Assessment
“To address the social, ethical and environmental challenges in the global coal mining sector, a group of major European utility companies established Bettercoal in 2012. This initiative strives to address the risks in the coal supply chain and act on a continuous improvement principle.”

Popa-Antohi says Bettercoal is currently the only global standards initiative for the coal supply chain that assesses the performance of coal mining operations against the principles of the Bettercoal Code through the Bettercoal Assessment Process.

South African coal exploration and mining company Canyon Coal was the first coal mining company in South Africa to participate in the Bettercoal Assessment Process starting in 2015.

After completing its self-assessment in May 2015, Canyon’s Hakhano colliery, in Mpumalanga, and Canyon Coal’s head office were assessed by an independent third party.

Popa-Antohi indicates that the assessment found that Canyon Coal complied strongly in areas of legal requirements and, although the mining operation was located in a relatively water-stressed area, water management was identified as an element of good practice.

“As a midtier miner and supplier, the independent assessors further identified that Canyon Coal could benefit from further formalising its systems, procedures and local stakeholder engagement while maintaining its close quality team.”

With its strong export portfolio, Popa-Antohi emphases that Canyon Coal’s focus is not about satisfying market demand, but about doing so sustainably, respecting the rights of employees, caring for the environment and assisting with community development initiatives.

Popa-Antohi notes that responsible business is good business and, “in a world where demand for coal will inevitably stagnate or reduce, demonstrating a commitment to responsible practice will become a differentiator in the eyes of the buyers”.

Edited by Mia Breytenbach
Creamer Media Deputy Editor: Features

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