China’s SA ambassador confirms no investment in Limpopo coal project

In another blow to South Africa’s struggling junior coal mining sector the Chinese government has confirmed that it is pulling out of funding a proposed, new 3GW coal-fired power plant in Limpopo Province.

This follows on from the statement made on September 21 this year by Chinese premier Xi Jinpiing that China would end funding of overseas coal projects.

According to a release from non-government organisation (NGO) Fossil Free South Africa – which has bitterly opposed the proposed new power station – the confirmation was provided through correspondence with the Chinese ambassador to South Africa.

In a release issued on November 18, Fossil Free SA co-ordinator David Le Page said that Ambassador Chen Xiadoing had confirmed that China “ will not build new coal-fired projects abroad.”

He quoted the ambassador as writing “China is willing to work with all countries, South Africa included, to establish and improve a green and circular economic system development system and green and low-carbon energy”

The proposed coal plant was to be part of the planned Musina Makhado Special Economic Zone (MM – SEZ) situated in northern Limpopo Province and was intended to provide power for a number of industrial projects proposed for the region including ferrochrome and ferro-manganese plants.

The coal company most likely to benefit had the power station gone ahead was MC Mining which owns a number of coal deposits in the region close to the MM-SEZ.

MC Mining is currently battling to find the funds to go ahead with its Makhado metallurgical and thermal coal project – also in northern Limpopo – but has been hamstrung by global investor anti-coal sentiment which has made funds extremely difficult to raise.

The company’s annual report for the year to end-June published at end-September contained a statement by the auditors that “there is a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern.”

Another coal junior – Resource Generation – was forced into administration earlier this year after it was unable to find the finance needed to developed its proposed Boikarabelo coal project in the Waterberg.