S.Africa power crunch may benefit coal sector

South Africa’s electricity crisis has cost its economy dearly but it also offers the country a chance to revitalise its vital coal industry.

Years of underinvestment in the power sector culminated in widespread supply shortages in January, shutting the mines Africa’s largest economy depends on and slashing the coal exports the rest of the world needs.
But it also jolted South Africa into urgent and unprecendented collective action. The central government, mining firms, state power utility Eskom, rail and port operators are working together like never before to solve the problem.

“This crisis will have an impact for the good in many ways on domestic and export coal. A lot of new mines will open, licences will be easier to get,” said Xavier Prevost, senior coal analyst at Wood Mackenzie in Johannesburg.

A senior coal industry executive agreed. “Nobody is welcoming the power crisis but it’s fair to say there are likely to be broader benefits to the coal industry as a whole from the measures being implemented to address the crisis,” he said.

Guardian