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Coal love it or hate it:
this fossil fuel is still economically vital to SA

If we want to move away from coal-fired generation to renewables it will be necessary to invest R 1.2 trillion into the South African power sector over the next decade.

Coal, you can love it or hate it as a fossil fuel, but for South Africa it is still a vital component of its energy mix.

Approximately 30% of the coal mined in South Africa is exported while the other 70% is consumed locally in the generation of electricity, feed for steel, gasification at Sasol, and inputs in other industries.

Exports bring in the bucks. But due to Transnet’s woes companies are struggling to get their commodities to local ports.

Coal exports were at a record low from the Richards Bay Coal Terminal (RBCT) of 50.35 million tons (Mt) last year. Levels this low were last seen in 1997 at 58Mt. This was a lost opportunity for South African exporters during a time when coal prices were at record highs because of the war in the Ukraine. An estimated R20 billion was lost by exporters because of the problems that affected Transnet during 2022.

Transnet Freight Rail was constrained in three main areas: namely the strike that lasted 12 days, train derailments, one of which was so severe that the northern line was locked down for almost ten days, as well as other derailments on the line during the year that affected the capacity for coal exports to the RBCT. This prompted some exports to go via Mozambique to Maputo’s port, doubling its coal exports in 2022.

The third constraint, and in the most control of Transnet itself, is the unavailability of the original equipment manufacturer (OEM) spare parts required for the new locomotives purchased from Chinese manufacturers. This was in retaliation to the South African court’s suspending the infamous contract of R54bn for 1064 locomotives due to maladministration.

CEO of Transnet Freight Rail Sizakele Mzimela, speaking at the McCloskey Coal Conference in Cape Town on Thursday, said, “There was no expectation that the reaction of the Chinese would be to stop supplying us the spares not only for the locomotives that were under the 1064 transaction, but for the locomotives we also bought from the Chinese prior to the 1064 [contract].”

This has meant that during 2022 up to 138 locomotives were parked because of a lack of OEM parts needed for the maintenance of the locomotives. This severely hampered the capacity of Transnet to be able to export coal through the Northern line to the RBCT. As a result, South African coal mines were unable to export an additional 20Mt possible during a time of coal price highs. RBCT has an export capacity of 91 Mt.

To date the issue with the Chinese locomotives manufacturers has been sorted out (up) to a point on Transnet’s side.

“It’s out of my hands nothing more I can do,” said Mzimela as the new contract was contingent on the Chinese having issues of requiring tax clearance by SA Revenue Service and additional compliance with the South African Bureau of Standards sorted.

If the deadlock with the Chinese continues Transnet could see up to 168 locomotives parked this year, constraining their export capacity to 60Mt in 2023. This is where intervention from government needs to expedite the issues with the Chinese.

Another problem that has plagued Transnet, adding to the unreliability of the service, is cable theft. It is estimated that R2bn of damage in cable theft has occurred on the rail infrastructure.

“It’s not only the overhead cables, but also the cable connecting the signalling equipment that is stolen from the network, which added delays to the movement of the locomotives,” said Mzimela.

Partnerships between industry and Transnet are focusing on the cable theft problem. However, the key partner, the police, are still missing in action. Recent videos showing cable theft right outside a police station fail to inspire confidence.

Transnet’s woes aside, South Africa needs coal to keep its lights on amid a power crisis that Eskom so far has been unable to solve.

While the West puts pressure on South Africa to de-carbonize, we must not be gaslighted into sabotaging South Africa’s economic development for unrealistic green goals. This as Europe is buying coal hand over fist amid an energy crisis after Russia’s invasion of Ukraine and subsequent sanctions.

If we blindly pursue the green agenda we might as well be scoring own goals.

If Eskom were to follow the greenies requirements, 22 GW worth of coal fired generation would need to be shut down due to non-compliance with carbon emission levels. Carbon capture and sequestration at these power stations are unfeasible as the cost to implement would cripple the economies of power stations, many of which are reaching the end of their operational lifespans.

By 2035, nine power plants would have reached the end of their lifespan with Komati in Mpumalanga already reaching the end recently. The alternative is to invest R300bn into flue-gas desulfurization equipment to meet the government’s minimum emission standards.

The Just Energy Transition plan also has challenges that have not been solved, the main coming in the form of capacity and stability in the grid.

“There is no more capacity in the grid in the Northern Cape for any more renewables to be connected up,“ said outgoing Eskom CEO André de Ruyter. “We find ourselves in the current energy predicament because in the past we spent insufficient time talking about the future”.

If we want to move away from coal-fired generation to renewables it will be necessary to invest R 1.2 trillion into the South African power sector over the next decade.

“The strategic priority is to address the grid or we will face far more serious constrains in the future” said De Ruyter. This includes new transition lines as well as 4000MW of hydro pumped storage necessary for grid stability in the medium term.

Published 6 February 2023, IOL

This month's top international coal headlines

  • Richards Bay prices steady with July trade — McCloskey
  • EMEA thermal coal deliveries crowded out by cheap gas, high stockpiles
    — Platts CTI
  • Coal to dominate India power mix despite record renewable push — Bloomberg
  • Prices fall in Asian thermal coal market on low demand — Platts CTI
  • Pakistan plans to quadruple domestic coal-fired power, move away from gas
    — Reuters
  • South Korea's intake of South African surges in Mar — McCloskey
  • Richards Bay edges up with focus on July cargoes
    — Southern African Coal Report
  • Minerals Council calls for privatisation of Eskom's coal power plants
    — Southern African Coal Report
  • INDIA DATA: Coal output rises 9% on year to 73Mt in April — Platts CTI

Headlines from earlier this year

April 2023
  • Atlantic thermal coal pricing remains rangebound on weak spot activity
    — Platts CTI
  • Med, MENA thermal coal deliveries slow on competitive alternatives — Platts CTI
  • Asian thermal coal prices stable; participants expect rise in activity — Platts CTI
  • The rich world’s plan to help developing countries go green is floundering
    — Bloomberg
  • China automating mines to improve safety as coal output grows — Reuters
  • WCA India plans to build more coal plants — WCA
  • Biden EPA to issue power plant rules that lean on carbon capture — Reuters
  • Indian coal-fired sponge iron output jumps 17% in FY 23 — McCloskey
  • Pacific Supramax freight rates slide on ample tonnage supply — Platts CTI
  • Asian thermal coal market sees staggered rise in prices — Platts CTI
  • Market recovers from 17-month lows on opportunistic buying
    — Southern African Coal Report
  • With Europe secure, SA exporters turn focus to Asia
    — Southern African Coal Report
  • ANC leaders back delay of coal plant decommissioning
    — Southern African Coal Report
  • Coal to remain basis for Polish power for years: minister — Platts CTI
  • Indian power plant coal imports jump 106% in 2022-23 — McCloskey
  • Atlantic thermal coal pricing remains rangebound on low spot demand
    — Platts CTI
  • NW Europe thermal coal consolidates above $140/t on May trade — McCloskey
  • Pendulum swing from coal to renewables will spell disaster — Engineering News
  • Prices drop to 16-month low on limited high CV demand
    — Southern African Coal Report
  • Ramaphosa prioritizes energy security in phase out plan
    — Southern African Coal Report
  • Big lie about Eskom power station breakdowns — Daily Investor
  • South Africa should not shy away from costs of fixing power crisis – Minister
    — Reuters
  • Coal Giant Scrambles to Run on Gas and Hydrogen in South Africa — Bloomberg
  • Richards Bay prices largely steady on supply-demand balance
    — Southern African Coal Report
  • New minister looks to extend life of Eskom coal plants
    — Southern African Coal Report
  • Atlantic thermal coal price rangebound on weak spot activity — Platts CTI
  • Med, MENA coal deliveries up 67% on week on cement demand: sources
    — Platts CTI
  • Electricity minister Kgosientsho Ramokgopa to push for extending life of ageing coal-fired power station — Daily Maverick
  • NW Europe prices decline with May trade — McCloskey
  • South African thermal coal demand seen fading in Pakistan — Platts CTI
  • Richards Bay prices edge up on India buying — Southern African Coal Report
  • Minergy resumes output at Botswana’s Masama mine
    — Southern African Coal Report
  • RBCT Q1 exports down 19% on year due to rail issues
    — Southern African Coal Report
  • China ramps up import buying in summer stocking race — McCloskey
  • Ghost trains haunt South Africa’s coal export corridor — Montel
  • March thermal coal traded volumes plunge 95% to 554,000 t: CME — Platts CTI
March 2023
  • Atlantic thermal coal prices drift higher on weak spot activity — Platts CTI
  • RBCT Q1 exports down 19% on year due to rail issues — McCloskey
  • India buys five S. Africa cargoes, two petcoke deals — McCloskey
  • South Africa's Thungela Resources expects lower coal sales as rail issues roll on — Platts CTI
  • Zimbabwe's new 300MW coal-fired plant starts feeding into grid — Reuters
  • Richards Bay near one-year lows on weak European demand
    — Southern African Coal Report
  • Thungela export output may fall 20% due to rail issues — McCloskey
  • Med, MENA thermal coal imports down 29% on week to 499,300Mt — Platts CTI
  • CEZ gets extension at Bilina lignite mine until 2035 — Reuters
  • Coal use seen peaking next year as India, China determine future — Bloomberg
  • India importers buy South African, Indonesian material — McCloskey
  • China ready to bring in "as much imports as possible" — McCloskey
  • Offer price levels remain elevated in Asian thermal coal market — Platts CTI
  • RWE coal burn in Germany, Netherlands up 8% in 2022 — McCloskey
  • Richards Bay likely to hover near one-year lows in near-term
    — Southern African Coal Report
  • Pakistan Feb coal fired generation falls 57% on year to 1,091 MWh — Platts CTI
  • Richards Bay May cargo trades higher — Platts CTI
  • Coal's dramatic turnaround in a historic year - 2022 — Issuu
  • With Russian gas gone, coal makes EU comeback as ‘traditional fuel’
    — EURACTIV.com
  • Atlantic thermal coal markets marred by low spot activity — Platts CTI
  • Med, MENA imported coal volumes decline amid gas price drop — Platts CTI
  • South Africa's Exxaro expects lower thermal coal prices after record 2022
    — Platts CTI
  • Coal logistics crisis is a few dollars away from catastrophe — News24
  • Rail crisis: SA miners forced to put 400 trucks on the road every day to get coal to ports — Reuters
  • Mining in South Africa: A year of steady descent — Mining Review Africa
  • China's Jan-Feb coal output jumps 10.3% for winter heating — Reuters
  • Signs of latent demand arrest price drops in Asian thermal coal market
    — Platts CTI
  • Richards Bay edges up from one-year lows on colder European weather
    — Southern African Coal Report
  • February thermal coal derivative trades fall 73% on year to 2.3Mt: CME
    — Platts CTI
  • Vietnam 2023 coal imports seen falling 58% to 13.2Mt - media — Reuters
  • Med, MENA coal trading activity firm, prices volatile — Platts CTI
  • Energy crisis fuels coal comeback in Germany — Reuters
  • China gives new backing to coal even as clean energy accelerates — Bloomberg
  • Mantashe affirms commitment to coal as Greenpeace disrupts his Indaba speech — Engineering News
  • Coal remains 'most important' power source for Germany in 2022: statement
    — Platts CTI
  • Botswana's Minergy seeks govt bailout after halting coal mining ops
    — Reuters
  • Poland doubles thermal coal imports in 2022 – agency
    — Montel News
  • Pakistan coal consumers seek multi-origin material; South African-origin imports decline — Platts CTI
  • Atlantic thermal coal prices down sharply to start week — Platts CTI
  • Botswana turns to US funders to build coal-to-liquids plant
    — Southern African Coal Report
  • Richards Bay under pressure again after snapping 5-week losing streak
    — Southern African Coal Report
  • RBCT's exports start the year down 23% — Southern African Coal Report
  • Grindrod eyes greener commodities as coal outlook dims
    — Southern African Coal Report
  • German coal imports rose 8% in 2022, Russia sold 37% less - data — Reuters
  • Atlantic thermal coal prices slide on ample energy supply — Platts CTI
  • Thermal coal shipments to Med, MENA almost double — Platts CTI
  • Australian Energy Minister rules out ban on new coal mines — Bloomberg
  • No fresh fixtures were heard out of Persian Gulf — Platts CTI
  • South Africa's RBCT coal exports hit 29-year low in 2022 — Reuters
February 2023
  • Australian miner TerraCom's July-December coal sales slip 1% on year
    — Platts CTI
  • Richards Bay prices rebound further on supply issues
    — Southern African Coal Report
  • China approves 106 GW of new coal projects in 2022, highest since 2015: report — Platts CTI
  • Coal Outlook: From beyond to infinity — Mining Review Africa
  • Atlantic thermal coal prices recover to one-month high — Platts CTI
  • Med, MENA coal trading activity firm, Russia supply tightness: trade — Platts CTI
  • Newcastle thermal coal futures rise to 8-day high as demand comes back
    — sxcoal.com
  • China's portside thermal coal prices surge after mine accident — sxcoal.com
  • Bettercoal launches South Africa working group — World Coal
  • China coal mine closures after deadly incidents likely to add to commodity pressure — South China Morning Post
  • Energy Debate Falling Into Alternative Reality — World Coal Association
  • Turkish power plant suffers structural damage - reports
    — Southern African Coal Report
  • US thermal coal exports to NW Europe surge in January
    — Southern African Coal Report
  • Sasol’s S. Africa H1 coal exports drop 25% on rail issues, internal demand
    — Southern African Coal Report
  • Richards Bay prices edge up from 13-month lows — Southern African Coal Report
  • Floods hobble coal mining, export routes and Eskom ops
    — Southern African Coal Report
  • Drop in S. African export prices ice out junior miners
    — Southern African Coal Report
  • South Africa to get $8.5 bln from U.S., EU and UK to speed up shift from coal
    — Reuters
  • U.S. coal power refuses to die. What that means for climate — E&E News
  • Company says it's built first-ever EV battery using coal — WBOY.com
  • Coal India offers 11Mt coal annually to sponge iron sector — Platts CTI
  • Taiwan Power Co. seeks 400,000 t thermal coal for Sep-Dec delivery — Platts CTI
  • Asian thermal coal market recovers on pockets of demand — Platts CTI
  • Indian importers buy SA, Indonesia and US cargoes — McCloskey Coal Report
  • South Africa won't abandon coal — BusinessTech
  • SOUTH KOREA DATA: Coal imports fall 5% on year to 10.66Mt in Jan
    — Platts CTI
  • Big petrol price hike expected in March — News24
  • India's Adani Enterprises' coal trading volume rises to 67.7Mt in Apr-Dec
    — Platts CTI
  • Asian thermal coal market remains subdued on scarce demand — Platts CTI
  • INDIA DATA: Dec coal imports surge 30% on year, Apr-Dec imports rise 16%
    — Platts CTI
  • RBCT prices fall to 13-month low on poor European demand
    — Southern African Coal Report
  • S. Africa renews clean coal tech push amid energy security fears
    — Southern African Coal Report
  • An uncomfortable reality is dawning as rich countries turn back to coal
    — Sunday Times
  • Korean generators buy Indonesian, S. African in tenders
    — McCloskey Coal Report
  • Med, MENA shipments down 71%; Iskenderun port halts operations — Platts CTI
  • Fitch expects 2023 thermal coal consumption growth to fall, prices to weaken
    — sxcoal.com
  • SA's coal export snags worsen as rail shipments slump — Bloomberg
  • Prices continue to move lower in Asian thermal coal spot market — Platts CTI
  • As we move towards a just transition and a resilient energy system, we mustn’t abandon coal — yet Daily Maverick
  • South Africa looks to make mining sector more competitive, sustainable
    — Platts CTI
  • Asian thermal coal market sees inquiries gradually return — Platts CTI
  • Richards Bay prices rise with April trade — McCloskey Coal Report
  • We can handle Eskom: DMRE — BusinessLIVE
  • Cash-strapped Transnet warns of rail tariff hikes to 'recover costs’ — News24
  • Richards Bay hits short-term bottom, recovering from 1-year low
    — Southern African Coal Report
  • Richards Bay price floor seen at $110-120/t FOB - McCloskey conference
    — Southern African Coal Report
  • Eskom coal demand to steadily drop below 90 Mtpa from 2025
    — Southern African Coal Report
  • Transnet coal railings to struggle for years due to locomotive issue
    — Southern African Coal Report
  • SA still heavily reliant on coal for electricity — News24
  • Coal love it or hate it: this fossil fuel is still economically vital to SA — IOL
  • Serious challenges face the South African junior coal mining sector
    — Mining Weekly
  • Coal still king in SA, even amid a 'just' energy transition — EWN
  • Coal industry can innovate to contribute to energy transition — SA News
  • Govt urges miners to make a case for coal by investing in clean technology
    — Miningmx
  • Coal corruption alive and well in Eskom, says outgoing CEO De Ruyter
    — Miningmx
  • Gladstone coal delivery restart delayed further — Argus Media
  • Eskom coal demand to steadily drop below 90 Mtpa from 2025
    — McCloskey Coal Report
  • Pakistan thermal coal price drops amid influx of Mozambique volumes
    — Platts CTI
  • Atlantic thermal coal prices soften further on low spot activity — Platts CTI
January 2023
  • RBCT rebounds from one-year lows on renewed spot buying
    — Southern African Coal Report
  • Asian thermal coal market shows signs of reappearing demand — Platts CTI
  • South African thermal coal exporters missing out on high prices due to RBCT issues — Platts CTI
  • Richards Bay prices rise with March trade — McCloskey Coal Report
  • Big jump in petrol prices coming next week — BusinessTech
  • Shifting coal trading patterns escalate ton-mile demand — Platts CTI
  • Asian thermal coal market remains muted amid Lunar New Year holidays
    — Platts CTI
  • Maputo coal exports double in 2022 to 5.2Mt — McCloskey Coal Report
  • Coal-fired power to remain key in South African energy mix: President
    — Platts CTI
  • Coal exports not to blame for power crisis — Southern African Coal Report
  • RB prices rebound from one-year lows on India buying
    — Southern African Coal Report
  • Thermal coal shipments to Med, MENA rise 70% on week amid steady demand
    — Platts CTI
  • Canyon Coal kicks off construction of Gugulethu Colliery
    — Southern African Coal Report
  • INTERVIEW: Coal demand may outpace supply growth in coming years, says Indonesia's Bumi — S&P Global
  • Indonesia 2022 coal exports rise 14.3% YoY, Kpler — sxcoal.com
  • What is the future for coal in South Africa? — Energize
  • Asian thermal coal prices under pressure due to limited demand — Platts CTI
  • S. African prices drop to one year low on mild European winter
    — Southern African Coal Report
  • Coal conundrum on fire in SA — The Citizen
  • German hard coal importers able to replace Russian supply - industry body
    — Reuters
  • Big investors ask Glencore to justify thermal coal development — Reuters
  • South African coal returns to EMEA markets — Platts CTI
  • Asian thermal coal market remains quiet amid bid-offer gap — Platts CTI
  • Germany's RWE starts demolition at Luetzerath to expand Garzweiler lignite mine — Platts CTI
  • Global seaborne coal demand to rise in 2023, prices strong
    — McCloskey Coal Report
  • ANC to approach energy transition with caution — Southern African Coal Report
  • RB price drop attracts first spot trades in weeks — Southern African Coal Report
  • Transnet makes inroads as the fight against cable theft continues
    — Southern African Coal Report
  • INDIA DATA: Coal imports rise 17% on year to 19Mt in November — Platts CTI
  • Uniper extends market operation of two hard coal-fired power plants — World Coal
  • UK government approves new coal mine in Cumbria — World Coal
  • Global coal consumption set to reach new high in 2022 — World Coal
  • Atlantic thermal coal prices slide on low demand, high stockpiles — Platts CTI
  • China's 2023 steam coal contract supply to reach 2.6 Bt, NEA — sxcoal.com
  • Mongolia eyes higher coal selling prices from Feb 1 — sxcoal.com
  • China's coal consumption expected to peak in around 2024, report — sxcoal.com
  • Optimum Coal business rescue practitioners threaten to go to court if RBCT terminates contract accreditation — City Press
  • Global coal demand is set to rise amid upheaval of the energy crisis
    — Mining Review Africa
  • THERMAL TRACKER: Nuclear regains lead from gas as French reactors return
    — Platts CTI
  • China’s easing of Australian ban may boost met coal; but thermal difficult
    — McCloskey Coal Report
  • China’s ban on Australian coal thaws as four end-users get nod to import
    — McCloskey Coal Report
  • Dec thermal coal traded volumes slump 82% to 1.1Mt: CME — Platts CTI

Headlines from past years



To be announced





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