[miningmx.com] – THE South African government will soon make recommendations about how it intends to grow the country’s coal production – a move primarily aimed at securing additional supply for Eskom.
Mines minister, Susan Shabangu, speaking at the McCloskey Coal Conference, held in Cape Town, said that the recommendations follow a coal resources and reserves study, due to publish its findings shortly, showing where new deposits could be mined.
“The report has given us better insight on the extent of the potential and how we should interface the coal development with infrastructure planning mechanisms in government, which will enable the coal sector to do better,” said Shabangu.
“In the long term, the outcomes of the coal resources and reserves study presents an opportunity for new investment and growth of this sector,” she said.
“A task team will soon provide recommendations that will inform the strategy to place this sector on a positive growth path,” Shabangu added.
Shabangu’s comments come only a month after the ANC’s national conference agreed to ditch nationalisation of the mining industry in favour of declaring certain assets strategic of which coal may be one.
Shabangu said it was too early to comment on the implications of declaring coal a strategic resource, but added that “.. decisions would not be taken unilaterally’, especially the prospect of an export levy, intended to provide Eskom with coal security.
She added that whatever powers may adopted by government in the event of declaring coal a strategic resource, they would be enshrined in the Minerals & Petroleum Resources Development Amendment bill, currently subject to public comment.
She declined to comment on whether an export tax or levy would be applied to coal exports.
Xavier Prevost, an analyst at XMP Consulting, said it would be dangerous if government started to approve the amount of coal exports. “I don’t think we’ll go that route, but if we do we will have a problem,’ he said.
The task team recommendations, which would be based on reserves and resources data compiled by the government-run Council for Geosciences, would be discussed at MIGDETT, the industry, government, and union organisation that is focused on employment and growth in the sector.
The task team’s work is also in addition to the work underway by the Presidential Infrastructure Coordinating Commission (PICC) which also wants to accelerate investment infrastructure.
Shabangu said she recognised the importance of balancing South Africa’s export market with the domestic requirements of Eskom. “Coal exports need to be sustainable,’ she said.
However, Shabangu added: “I cannot emphasise enough the importance of energy security to our socio-economic development objectives, which underpin our sustainable economic growth and access to energy by ordinary South Africans’.
