By Gavin du Venage, South Africa Editor
South African coal producers are not going down without a fight, as they battle against tightening environmental restrictions and failing infrastructure. At the 5th Annual Coal & Energy Transition Day held in Johannesburg in July, industry leaders gathered to discuss the leading issues facing coal producers in the region.
Some of the concerns will be familiar to international observers; a general decline in global demand, and rising competition from renewable energy and gas.
Prominent at a local level are the troubles at state-owned logistics firm Transnet which has the exclusive right to rail coal. A dedicated coal line runs from Mpumalanga province eastwards to the coast 600 km away. Coal exports, however, have fallen from 70 million metric tons (mt) to just 50 million mt over the past year.
Transnet has a growing fleet of locomotives it has benched, owing to lack of spare parts only available from its Chinese supplier, the state-owned CRRC Corp.
“We are losing 18 million mt/y because of the dispute with China,” Transnet CEO Sizakele Mzimela told the event. “It is not possible to replace or substitute with other suppliers, or the private sector.” The coal line uses 200-wagon trains that are custom designed to Transnet’s needs.
They will have to be replaced entirely with a new fleet if the dispute is not resolved. “If we went out to market, it would take 18 months for first delivery,” Mzimela said.
Energy consultant Ian Hall said failing rail is costing the country its status as a leading coal exporter. “We used to be the second largest exporter in the world,” Hall said. “Now, Australia and Indonesia are eating our lunch.”
Australia is shipping 500 million mt a year, almost its entire annual production. South Africa has plenty of resources, said Hall; it’s the lack of infrastructure that’s hindering development of deposits. “We have 95 billion tons of coal,” Hall said. “The question is whether it will get out of the ground.”
Meanwhile, South African electricity utility Eskom, assured miners that it has no intention of giving up coal entirely “We are going to be using coal for quite some time. Our newest stations have 70 years of life left in them,” said Matthew Mflathelwa, general manager, strategy and planning at Eskom.
The utility is struggling to keep its fleet of coal plants running, as breakdowns plague its mostly elderly fleet. It’s two newer, mega coal plants meanwhile have been beset with technical issues that have delayed their full generating capacity from being delivered.
Eskom is now focusing on reliability as well as on adding more non-coal generation to the grid. Coal itself, however, will remain a baseload fuel even as 30% of the fleet, mostly older stations, are cut.
“We remain committed to coal for many years to come,” Mflathelwa added. “Coal is in our blood.”
