Hike in insurance premiums could deliver knock-out blow for under pressure coal miners

THE rising costs of insuring coal mine assets may in the long run render those mines increasingly less profitable, accelerating their closure and that of coal-fired power stations, Minerals Council SA (MCSA) president and Exxaro CEO, Mxolisi Mgojo, said on Tuesday.

He was speaking at an MCSA presentation to the media on coal and the just transition, on the sidelines of the Investing in African Mining Indaba in Cape Town.

Insurance premiums were rising as international insurers were responding to environmental, social and governance concerns about coal, said Mgojo. Some are refusing to insure and some are weighting the premiums for coal miners, he said.

Mgojo said there is still finance available for coal projects. Although local banks recently declined to finance two planned coal-fired power stations because they did not include technology to promote emissions reductions, the banks will still finance coal power stations using supercritical boilers.

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