Mines minister Susan Shabangu

Eskom's coal supply gets priority

Brendan Ryan | Tue, 07 Feb 2012 10:50

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[] -- COAL was one of the five minerals picked out for local beneficiation because of its strategic importance to South Africa, according to Minister of Mineral Resources Susan Shabangu.

Speaking at a press conference following her address to the Mining Indaba in Cape Town, Shabangu said coal remained critical to the future development of the country.

This was despite government’s stated objectives in terms of the Integrated Resources 2010 plan to increase future power generation from nuclear and alternative energy sources.

“Coal has brought us to where we are in South Africa. It will still be part of our future,” she said.

The five minerals selected for South Africa’s beneficiation strategy were manganese, iron ore, coal, platinum and titanium.

Shabangu added the five “pilot mineral value chains” involved were iron and steel; energy; autocatalytic convertors and diesel particulates; titanium and the jewellery value chain.

In reply to questions, she agreed that the driving motivation behind the inclusion of coal was to meet Eskom’s concerns over the future security of coal supply to its power stations.

South Africa already beneficiates coal on a massive scale through the Sasol oil-from- coal synfuel plants and through Eskom’s power stations, which burn coal to provide more than 95% of the country’s energy.

Over the past year, executives from Eskom have repeatedly stated their concern about the medium and long-term supply of coal to its power stations.

Eskom’s concerns have been heightened because of competition from Indian buyers for the low-grade coal that its power stations burn and for which, until now, there has not been a viable export market.

The state-owned utility is understood to have lobbied government over restrictions to be placed on the country’s coal exports if required.

“We need to strike a balance between exports and local beneficiation of coal. Coal is a strategic commodity and we are going to continue to depend on it for a while,” said Shabangu.

“Given the size of our coal reserves, we cannot just abandon coal at this point in time.”

In her address to the Mining Indaba, Shabangu said, “It is not our intention to force mining companies into being manufacturers, but rather to address the challenge of the inaccessibility of our raw materials as an impediment to greater local beneficiation.

“I am delighted with the initiative shown by some mining companies to support the aims of the strategy. This work demonstrates their commitment to South Africa.”

Asked for practical details of how the beneficiation strategy would be implemented, Mineral Resources Director-General Thibedi Ramontja said the plans were being developed.

He added that the key issues were access to raw materials for local manufacturers who wished to beneficiate them, and the development of the required skills.

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