'Focus domestically to mitigate coal export slump'

Local coal exporters are
exploring new coal export
markets in the wake of a
global slump in demand
and drastic commodity
price cuts. This includes
looking at increasing the
market domestically, which
would necessitate changing
the current structure of
coal transport in South
Africa.
This was one of the
conclusions reached during
the Fossil Fuel Foundation’s
‘Infrastructure and
Logistics for the Coal
Industry’ workshop held in
Johannesburg last week,
with senior coal analyst at
XMP Consulting, Xavier
Prevost, pointing out that
China’s decision not to
import coal had driven a
lot of changes in the global
industry.
“Thankfully, India is now
importing about 50% of
South Africa’s coal, with its
demand projected to grow
even further in the near
future,” he said.
According to Prevost,
India, Turkey, Morocco,
Italy and Pakistan were
now SA’s top five coal
export markets. “Africa and
the Middle East are also
growing markets but coal
exports will never recover
the allure they once had,”
he commented.
Prevost therefore believes
the focus should be on
increasing South Africa’s
domestic coal consumption
from its current 25 mtpa to
around 80 mtpa.
“South Africa faces an
energy crisis and there are
other businesses that could
take the burden off Eskom
by offering supplementary
power product, such as
boilers for example, which
require coal,” he said.
However, logistics
around this is tricky as new
coal fields are located a
“great distance” away from
the business hubs as the
country is running out of
coal reserves in the central
basins.
“Therefore, to ensure we
improve logistics efficiency
and keep the transport
costs down, a set of inland
coal terminals should be
created to serve nodes
of local supply,” Prevost
pointed out.
CAPTION
The Richards Bay Coal Terminal is expected to have 81 mtpa capacity within the 2016/2017
financial year.