SA’s coal exporters face a shrinking market
As Thungela Resources’ CEO attempts to talk up the future of the Anglo American coal spin-off, SA’s second-largest coal export destination is planning to bring coal imports to an end.
Thungela CEO July Ndlovu recently stated that a “just transition” for developing nations requires the continued operation of existing coal-fired power plants to avoid economic damage. However, even in the unlikely event that coal power stations can remain financially sustainable amid the ongoing wave of ever-cheaper renewable energy development globally, Ndlovu misses a key point.
In some of SA’s key export destinations any continued long-term operation of coal-fired power plants doesn’t necessarily support imported coal. It makes sense from an economic and energy security point of view for them to replace imports with domestic coal.
SA’s coal exporters face a shrinking market Major markets plan to rely more on their own coal production and renewable energy, posing a problem for local miners 27 May 2021 - 14:22 Simon Nicholas Picture: 123RF/ARTUR NYK
As Thungela Resources’ CEO attempts to talk up the future of the Anglo American coal spin-off, SA’s second-largest coal export destination is planning to bring coal imports to an end.
Thungela CEO July Ndlovu recently stated that a “just transition” for developing nations requires the continued operation of existing coal-fired power plants to avoid economic damage. However, even in the unlikely event that coal power stations can remain financially sustainable amid the ongoing wave of ever-cheaper renewable energy development globally, Ndlovu misses a key point.
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Seriti Resources has confirmed that all conditions precedent to its acquisition of South32 SA Coal Holdings Proprietary Ltd (SAEC) have been fulfilled, and the sale is expected to be completed on 1 June 2021. The new shareholders of 100% of SAEC will be Seriti Resources (90%), and the SAEC Employee and Community Trusts (5% each).
Since signing in November 2019, this transaction has been subject to various conditions precedent that have required, amongst others, the approval of the Competition Tribunal, the Minister of Mineral Resources and Energy, Richards Bay Coal Terminal, and Eskom.
Seriti CEO, Mike Teke, said: “The closure of this transaction is a significant milestone for Seriti and our employee and community trusts. It will secure a sustainable, reliable, and cost-effective coal supply solution to Eskom, and at the same time bring opportunities for further synergies and optimisation within Seriti. This is a further demonstration of our commitment to South Afr
, leading the Just Urban Transitions project.
Coal is on its way out, its economic usefulness nearing the end. The journey has only just begun and the road ahead is long and uncertain, but sure to be treacherous. The question now is not whether coal is in decline, but how successfully a coal phase-out can be implemented.
What is success? Well, it depends on whom you ask. For individuals and communities relying on coal for their livelihoods it certainly is to be able to sustain healthy and dignified economic lives beyond the end of this industry.
About 150,000 people are directly employed in the coal value chain in South Africa. About three out of four of these jobs are inherently linked to the production and transport of coal. These jobs are fundamentally at risk with the demise of coal-based activities. Mining accounts for the lion’s share, with about two-thirds (91,500) of total direct jobs. Transport-related jobs stand at about 15,000, split between Transnet freight rail