Losing ground (part two)

Historically, South Africa has benefitted from its coal deposits being relatively shallow with thick seams, making it easier and less expensive to mine. As reserves have depleted, particularly high-quality reserves, the industry has sought to upgrade technology and thereby extend the life of coal deposits. A growing market for low grade coal has opened up in Asia, which currently absorbs 25% of South Africa’s exports, with some local producers preferring the export market to selling domestically to Eskom. In the medium term, rising domestic demand from Eskom for energy generation, as new power plants come online, should provide an impetus for the reinvigoration of the mining sector. Eskom’s capacity expansion programme is expected to add 17,120 MW to current production by 2018. Increasing demand from the Asian market, particularly China, will also stimulate growth in the industry. Metallurgical coal production in South Africa is also expected to increase, from an output of 5 million tpa in 2011 to 12 million tpa by 2020.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/24092013/south_african_coal_sector_faces_key_challenges_part_two_73/