Cape Town, South Africa — MININGREVIEW.COM — 14 October 2009 – The global consumption of coal is expected to increase by 4% pa between 2010 and 2030 in line with the rising global demand for energy.
Making this prediction here, business research and consulting company Frost & Sullivan said that in order to boost production, the South African coal mining industry needed to open up new mines in the Waterberg coal basin to replace the depleted mines in the Highveld, Witbank and Ermelo coalfields in Mpumalanga.
New analysis from the company found that South Africa’s coal production would struggle to meet demand over the next few years. However, despite the environmental and logistical constraints that the South African coal mining industry was facing, coal production was likely to be on the upward trend by 2011 if new mines were opened in the Waterberg coalfield.
“South Africa’s coal mining industry remains unbalanced, with rising coal demand on one hand and constrained supply sources on the other,” notes Frost & Sullivan metals and mining analyst Wonder Nyanjowa. “With the global demand for coal rising by an annual average of 4%, the country’s available supply capacity may not be able to cope with the upsurge in demand.”
The expansion of Eskom’s electricity generation capacity, together with Sasol’s capacity expansion, is set to increase South Africa’s coal consumption by 75 Mtpa, but coal supply will remain stagnant, he adds.
“Limited rail and port facilities at Richards Bay Coal Terminal are expected to slow the growth of South Africa’s coal exports,” cautions Nyanjowa. “Growth prospects will be hampered further by tightening environmental laws in many parts of the developed world.”
He went on to point out that increased calls by the United States and other developed countries for a moratorium on the continued use of coal-fired power stations would also dampen export demand for South Africa’s coal in international markets.
“The South African coal mining industry needs to position itself well in order to meet the increased demand for coal in domestic and international markets,” remarks Nyanjowa. “The Waterberg coal basin, which currently has one operating colliery, represents the future of electricity generation and coal mining in South Africa, “ he concluded.