Mining in focus
Space for new companies
storage is thus critical, but at present,
affordable mass energy storage remains a
pipe dream,” he said.
The example of Germany is instructive.
While it has been at the forefront of
embracing and incorporating renewable
energy into the power mix, it has
experienced bumps in the road. The rapid
transition to renewables led to the cost
of electricity for households to almost
double between 2000 and 2017. In
addition, even though it has a reputation
for pioneering renewables, coal continues
to provide 40% of its power.
Another consequence of a badly planned
energy transition is that it will discourage
investment in coal mining. This in turn
would affect not only the industry’s ability
to keep up supplies to South Africa’s own
growing fleet of coal-fired power stations,
but also to supply coal to Asia’s high-
growth economies.
Mareda said that the environmental
consequences of coal must be faced up to.
However, there are emerging technologies
that attempt to mitigate many of the
downsides. For example, Integrated
Gasification Combined Cycle (IGCC)
and Eutectic Freeze Crystallisation are
leading technologies aimed at reducing
the use of water, while carbon capture
has become standard at many coal power
stations globally to reduce emissions.
Again, the example of Germany
is instructive: it has failed to meet its
emission reduction targets despite its huge
investment in renewables because it failed
to monitor increases in other sectors,
such as transport and manufacturing.
Electricity generated by coal is not the
only cause of carbon emissions.
coal is exported from, can move 72 million
tonnes of export coal per annum, and
Maputo, in Mozambique, has capacity
for another five to six million tonnes per
annum. There is also the dry bulk terminal
and the Navitrade Terminal at Richards
Bay which, between them, can take
another five to six million tonnes. In total
that is about 88 million tonnes per annum.
“Between Eskom and export, it adds
up to more than 300 million tonnes of
raw coal that should be mined every year.
There is also a 70 to 80 million tonne per
annum shortfall of coal in international
markets. Indonesia increased their
production from 290 million tonnes per
annum to 550 million ton per annum in
less than 10 years. It means more jobs
and foreign currency for Indonesia, it’s
massive. South Africa has a world class
port and infrastructure at RBCT with
a capacity of 100 million tonnes, and
it’s using only 72 million tonnes per
annum. There is obviously a shortfall,”
Bayoglu said.
The global thirst for coal is unlikely to
be quenched within the next five to ten
years. Coal has always been a bedrock of
the South African economy, and although
it is clear that renewables will play an
increasingly important role in the energy
mix in future, for now coal still appears to
reign supreme.
Although the coal playing fields in South
Africa are much more clogged than they
were 10 or 20 years ago, the good news
is that there is still space for a lot more
companies to enter the market. According
to Vuslat Bayoglu, CEO of Canyon Coal,
the fact that majors are exiting from coal
globally, has left a big gap in the market.
“South Africa is an emerging economy that
needs to create jobs. Therefore, it needs to
have a cheap and consistent power supply.
The country’s grid has to operate efficiently,
and coal is important because it generates
base load,” Bayoglu told Mining Mirror
during a recent interview.
“Anglo American is not putting more
money into coal, they haven’t built a new
mine in the last 10 years, so where is the
investment going to come from? South
Africa needs coal, Eskom needs coal.
The reason why Eskom is short of coal
is that major mining companies didn’t
invest in coal because coal is unwanted.
South Africa needs 130 million tonnes
for Eskom, and 20 million tonnes of
coal for industrial use, which means 150
million tonnes of saleable coal. Where
is this going to come from? On top of
that nobody is investing in new mines,”
Bayoglu said.
In addition, the Richards Bay Coal
Terminal (RBCT), where South Africa’s
Although renewables form an important part of the energy mix, questions are being ask whether
renewable energy sources like solar plants will be reliable.
More and more wind turbines are springing up all over South Africa, but coal remains at the mainstay of
the country’s energy mix.
www.miningmirror.co.za
JULY 2019 MINING MIRROR [23]