Coal production in SA: past, present, future

By Dineo Phoshoko

Coal is a significant energy source. South Africa is fortunate to be a coal producing country, however coal production has a negative impact on the environment because it is largely used as a fuel source in generating electricity. There are other advantages of coal, especially for South Africa’s economy.

Coal 001 web
Coal reserves in South Africa are expected to last for at least 100 years.
Image: Pixabay

History of coal mining in South Africa
The start of the 19th century was not just the beginning of gold mining in South Africa as it was also the start coal mining. The very first tonnages of coal extracted were from the Witwatersrand on the Highveld coal fields which were located close to the gold mines. 

The most significant coal producing plant is the Richards Bay Coal Terminal (RBCT). The terminal was established in 1976 and produces 12Mt of coal a year. Although the capacity increased to 91Mt, the past few years have seen it decrease due to the commodity slump. This lead to export prices decreasing by more than half since 2013. A decrease in the prices of coal did not make coal any less sustainable for South Africa or the world. 

Coal production and power generation
For as long as power is generated, there will always be a need for coal production. Coal production is very significant in South Africa as it provides 81% of the power generated by Eskom.

Praveer Tripathi, senior vice president of Atha-Africa Ventures, says that 35 to 80% of power generated is through coal fired power stations. Tripathi adds that power generation through coal was still one of the most cost-effective ways of producing power. “Currently as I see, it coal is very relevant to the power generation needs of South Africa.” The National Development Plan estimates that South Africa will need an additional 29 000MW of electricity by 2030. This implies that the proportion of people with access to electricity will increase by at least 90% in 2030. 

Cola fired power stations that were built at least 30 years ago are still be operational however it is estimated that they will only last until the mid-century. For example, the Emalahleni collieries are approaching the end of production. State power utility Eskom has since started the process of building two more thermal power stations: Medupi and Kusile. The two power stations will require coal to operate, therefore adding to the need for coal production in South Africa.

Coal production and the environment
According to the Chamber of Mines coal production contributes significantly to carbon emissions, which consequently have a negative impact on the environment. Other sources of producing energy such as various renewable energy sources have been explored as alternative energy sources. However, in in Tripathi opinion, this would not be practical for some power stations. 

“Base load can either be coal fired, diesel and hydroelectricity. Base load can only come from coal in the current situation.” Tripathi explains that base load would be problematic for solar energy because it is unrealistic to run a smelter on solar fired power because the power is not consistent. 

“What I would like is for civil society, the environmental NGOs, the community and the mining industry work together to create a sustainable future.”

Although Tripathi doesn’t see the practicality of reliance on solar energy, he does believe that it is important to find ways of mining coal in a more environmentally friendly manner. He also does not consider the drive to go green as a threat to the sustainability of coal production. “The challenge is not the drive to become more environmentally friendly, but rather the negative perception that has been created around coal mining. Environmental management is actually going to make the cost of mining cheaper in the long run,” he says. 

Tripathi is emphatic that it is possible for coal to be produced in an environmentally friendly manner. The Chamber echoes Tripathi’s views adding that the mining industry has a commitment to invest in, and use clean coal technologies. “Coal mining today (both open cast and underground) is different compared to 10 to 15 years prior. Regulatory mechanisms have encouraged coal companies look for better environmental solutions when it comes to coal mining,” he adds. Regulatory mechanisms have been created to make mining companies responsible about the environment. 

Mining in an environmentally friendly manner not only helps the environment, but also mining companies as well. As such mining methods will be very different as mining companies will focus on preserving as many resources as possible. “The entire way of doing business is going to become very efficient.” Efficiency will help the coal mines get lots of value without using a lot of resources. 

“The South African government has ratified the Paris Agreement, within the United Nations Framework Convention on Climate Change, on greenhouse-gas emission mitigation, adaptation and finance, which came into effect on 4 November 2016, demonstrating its commitment to address the challenges associated with climate change,” explains the Chamber.

Economic benefits of coal production
Another benefit of coal production in addition to power generation is the positive impact it has on the economy. The Chamber notes how South Africa is the fourth largest coal producer in the world with 28% of South Africa’s coal being exported, making coal one of the top five of the country’s exports. Tripathi attributes this to the uniqueness of South Africa’s coal. 

“There is always a demand for South African coal apart from power generation. Because of the very high fixed carbon content of the South African coal, it makes it prime fuel for any reduction process.” He adds that South Africa is home to 11% of the world’s known coal deposits in the world. 

Another benefit of coal production closely linked to the economy is job creation. Matshela Koko, former Eskom CEO, in his article Coal is the lifeblood of the South African economy, he highlights how the coal mining industry is the third largest employer after gold mining. The coal mining industry has about 87 000 employees. “When accounting for interdependent industries of coal such as power generation and transmission, total people employed increases to at least 130 000,” writes Koko. 

In an even broader view, Koko explains how the coal mining industry provided jobs for millions of people beyond the industry. “Coal-generated electricity supports South Africa’s industry which employs over 13.5 million people across a spectrum of sectors, including financial services, manufacturing, trade and agriculture.” Tripathi also adds that coal is the biggest foreign exchange revenue earner in South Africa, even more than gold.

In the article, Koko also mentions that despite the tough economic times, coal mining has had a positive impact on the economy as it as it made up 27% of all mineral sales in 2014 and 2015. According to Statistics South Africa (Stats SA), coal is a large contributor to the South African economy and will continue to be a valuable resource for as long as there is demand for it.

Coal mining sustainability
Most of the coal mined in South Africa comes from the Mpumalanga province where Universal Coal states that about 83% of the country’s coal comes from Mpumalanga. Other coal rich provinces are Limpopo, KwaZulu-Natal and the Free State. Universal Coal also adds that in recent years, the Limpopo province has become an attraction in terms of coal mining explorations and development. 

Future coal explorations reflect that coal production in South Africa is sustainable. In addition, coal production is also beneficial to the economic growth and development of the country. Stats SA estimates a further 116 years of proven coal reserves remain. “Coal is not going anywhere,” says Tripathi.

Coal production continues to face other challenges such strong disapproval from environmental NGOs. Tripathi explained that a way to deal with this challenge would be for all stakeholders to work together to reach a compromise that is suitable for everyone. “What I would like is the civil society, the environmental NGOs, the community and the mining industry work together to create a sustainable future.”

Click below to read the July/August 2017 issue of Mining and Mineral Product review

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