South Africa could face a coal shortage

There is a shortage of coal looming in the local market, believes African Rainbow Minerals (Arm) CEO Andre Wilkens.

“There is enormous growth planned in the power generation sector, which will place additional demand on coal supply.” About 90% of South Africa’s electricity is produced by coal-fired power stations, with the remainder flowing from nuclear, renewable and hydropower sources.
Department of Minerals and Energy coal and hydrocarbons chief mineral economist Xavier Prevost says, although there is currently great demand for coal on the local markets, there is no shortage yet.

“A shortage could arise, though, should new production not come on line.

“There are about 20 new local coal projects – some of them small – in the pipeline. If something derails these projects, the local market could be faced with a major shortage.” South African mines typically export their best-quality coal, after beneficiating it before shipping it abroad, while low-quality, much less expensive coal (known as middlings) is sent to power stations.

A well-placed source within the coal industry notes that there is a slight squeeze in the market at the moment, but concurs with Prevost that new mining projects should ensure that the situation does not become serious.

Mining Weekly