HomeMagazine ArticlesNo future slowdown in sight for coal consumption in South Africa

No future slowdown in sight for coal consumption in South Africa

Southern African Coal Processing Society (SACPS) chairman Jaco Scholtz

Despite South Africa’s reliance on coal for electricity generation and liquid fuels production that will persist well into the future, the coal sector is under pressure and facing increasing challenges.

This necessitates a step change to ensure that the coal sector prospers in future, Southern African Coal Processing Society (SACPS) chairman Jaco Scholtz tells Chantelle Kotze.

In the opening address at the biennual SACPS conference, which was held in Secunda, Mpumalanga, between 25 and 27 August, Scholtz said that the step change would require careful stewardship from coal industry leaders on how they dealt with stakeholders – namely government, communities and coal industry employees – to ensure optimal operational performance so that the sector remained sustainable.

Scholtz, who is also the operations director for mining solutions company Fraser Alexander’s mineral processing division, believes that future mines are going to look different from what they look today, with automation playing a major role in shaping and defining future mines. As a result, the sector needs to encourage younger generations to enter the coal sector and contribute to its evolution and improvement. This injection of new thinking will ensure the nurturing of mine personnel fit for the future, equipped with skill sets and technical knowledge that will drive innovation.

Scholtz drew delegates’ attention to the fact that South Africa’s energy sector would remain dominated by coal owing to the advent of Eskom’s Medupi and Kusile power stations, despite a growing focus on alternative energy sources. “This alone will secure South Africa’s coal future for many years to come,” he said.

“Despite this guaranteed future, the coal sector in South Africa has been negatively affected by global coal oversupply and a lack of demand, which has negatively impacted thermal coal prices during the first six months of 2015.”

Many African coal development projects in the pipeline will resultantly remain frozen until matters like policy uncertainty and lack of infrastructure are resolved, Scholtz notes, adding that the latter is especially applicable to projects in South Africa’s Waterberg, Botswana and Mozambique coal fields.

Scholtz is, however, confident that the coal sector will recover in the long term. He says that as mines scale back production, the dynamic will eventually shift from oversupply to under supply and prices will rise. During this time he expects some large multinational companies to exit or partially exit the South African coal sector, while the consolidation in the junior coal mining sector will continue. During this challenging time, industry leaders, service suppliers and miners….

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