Commentators predict positive outlook for coal

Coal remains one
of the cheapest
sources of energy
for emerging
economies and demand
for the commodity will
therefore continue for the
foreseeable future.
According to July Ndlovu,
CEO of Coal SA, power
generation is at the top of
the African development
agenda, with countries
under pressure to deliver
power to the people.
“In Africa power
generation is
critically
important.
The same
can be
said of
most
emerging
economies.
As Africa
grows so will
power generation.
If one steps back from this
then coal arguably remains
the cheapest source of
energy for most of these
emerging countries,” he said.
It is easy to transport, safe to
work with and the continent
has an abundance of it. Some
studies suggest coal will
still play a significant role in
years to come. It
is said that
by 2050 it
will be the
second
largest
source of
energy.”
He said
while
Chinese
demand for coal
had decreased
significantly
as the country’s
economy reset itself, India
had picked up a lot of the
slack, overtaking Chinese
demand in 2015.
He said he was extremely
positive about the future
of coal with expectations
that the price would
remain stable in the
medium to long-term
with demand picking up
as more economies set
about addressing power
generation.
India alone imported 140
million tons of coal during
the course of 2016. While
this was lower than what
was estimated, it is expected
to increase in the next year
as the country is expected to
see a drop in hydro-electric
generation.
At the same time it's
anticipated that demand
in China will pick up as it
remains the engine room in
the global demand for coal.
According to Ndlovu,
ongoing arguments around
coal being environmentally
unfriendly were also
being addressed as new
technologies were being
developed.
Coal-fired
power stations
that were
thermally
more efficient
were being
introduced to
address the
environmental
concern.
According
to Nombasa
Tsengwa,
executive head: carbon
operations at Exxaro,
South African coal
exporters need to be
more competitive if they
want to benefit from the
opportunities presented by
the emerging market.
“There are also a variety
of new players in this sector
that are finding their way
into the
market on
the back
of cheaper
freight rates
– like the
Colombians
for example,”
she said.
She added
that it was
essential
that South
Africa upped
its investment into the
coal sector, allocating the
necessary capital to projects
to ensure that the volume
demand from the world
could be met timeously.
INSERT
India alone imported
140 million tons
of coal during the
course of 2016.
– July Ndlovu