Coal has become a very controversial topic in recent times but remains an important commodity that still has a key role to play in the development of the economy in South Africa as well as the country’s future energy mix.

This article first appeared in

Mining Review Africa Issue 3 2018 

In response to this status quo, the Chamber of Mines Coal Leadership Forum, consisting of coal executives, launched the ‘National Coal Strategy for South Africa’ report at a briefing on the sidelines of the 2018 African Mining Indaba in Cape Town in February, where it stated its case for why coal mining is expected to remain an integral part of South Africa for the foreseeable future.

AUTHOR: Mining Review Africa’s senior deputy editor, Chantelle Kotze.

Relevance of the coal industry in South Africa

Coal has been instrumental in South Africa’s development, not only for the mining sector, but also for the broader industrialisation of our country,” says Chamber of Mines chief economist Henk Langenhoven.

“And it remains one of South Africa’s most abundant and valuable resources – with the country deriving over 82% of its electricity requirements from coal.

“Moreover, the coal mining industry’s economic impact is far reaching and contributes significantly to the South African economy. The coal mining industry also has a significant impact on other industries such as the electricity, manufacturing, construction and finance sectors,” Langenhoven notes.

The status quo of coal in South Africa

Despite being an integral part of South African’s mining industry and economy, negative views on coal and its impact on the environment have resulted in a sharp decline in the use of coal by the major economies of the world.

Because of coal’s contribution to greenhouse gas (GHG) emissions, many jurisdictions, including South Africa, have put in place strict environmental laws which have affected demand for coal.

The South African government has ratified the Paris Agreement, which entered into force on 4 November 2016, signalling government’s commitment to addressing the challenge of climate change.

Coal is currently the cheapest baseload technology.

This is supported by the IRP 2016 which shows that the levelised cost of electricity (LCOE) across the various coal technologies is lower than renewables.

If battery technology for renewables is taken into account, the LCOE increases significantly.

When it comes to emissions arising from coal powered generation, new technologies such as high efficiency, low emissions (HELE) technologies can drastically reduce GHG emissions.

Constraints to the growth of the coal industry

The following factors – in order of importance – are listed in the report as being the major reasons that will result in the stagnation, and later, shrinking of the coal industry:

  1. Policy and regulatory factor
  2. Access to capital
  3. Inadequate infrastructure
  4. Technology

Coal technology is the cheapest among electricity-generating technologies.

New technological solutions have recently emerged, such as HELE coal technologies which result in a reduction in CO2 emissions of between 2–3% for every 1% improvement in efficiency of a conventional pulverised coal combustion plant.

The four future coal production scenarios

  1. Scenario 1: Coal Extinguisher
  2. Scenario 2: Trudge Along
  3. Scenario 3: Status Quo
  4. Scenario 4: Firelighter

Future seems secure for now

The strategy document concludes that coal will continue to play an important role in the South African economy for the foreseeable future and that the mining industry is committed to investing in and making use of clean coal technologies in order to actively participate in the country’s transition to a low-carbon economy.

Ensuring that South Africa remains competitive and able to meet energy demands in the context of a developing economy, while at the same time reducing the country’s carbon emissions, will require close collaboration between all stakeholders including suppliers, users of coal and regulators.

Coal is the most variable and valuable chemical of all mineral commodities. It should be protected, nurtured and used wisely.

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