[miningmx.com] – GIVEN the aim is to secure coal at modest
rates of inflation for Eskom, the proposal to declare coal a strategic mineral – with
all its attendant legislative problems and challenges – seems to me a rather blunt
way of tackling the matter when, in fact, surgical precision would do.
That’s why it makes sense for an entity such as the South African Coal Roadmap to
cast its oar in the discussion, especially as the minerals resources and public
enterprises departments set about a cost/benefit analysis of coal as strategic
mineral.
What I also like about the SA Coal Roadmap – essentially an association of coal
producers – is that it will tackle the matter on the basis of commerce whereas the
Chamber of Mines marches to a more political beat, one suspects.
For instance, the joint CEOs undertaking to tackle mine safety, issued under the
aegis of the Chamber of Mines earlier this week, seemed a meek gesture. Who needs
more promises when 63 people have died underground already this year?
In any event, here are some things that need pointing out in respect of legislating
special-supply regulations for power station thermal coal.
One is that South Africa’s National Energy Act of 2008 already has stipulations in
place regarding securing energy supply that could be implemented. This surely
removes the need for a fresh blanket regulation that would only scare investors
witless? In fact, the act states: “. obligations to be imposed on producers of energy
feedstocks, to supply to the nominated state-owned entity the requisite energy
feedstock in a manner prescribed by regulation’.
The second point is meant to illustrate just how nuts and bolts the discussion about
coal supply needs to be.
Anton Eberhard, an academic at the University of Cape Town and a member of the
National Planning Commission (focusing on energy among other things), says Eskom
has a right to be concerned about coal supply.
That’s because some coal suppliers are washing middlings coal – the stuff Eskom
normally buys after/while the export coal has been produced – for higher paying
offshore buyers. Isn’t this just a question of implementing some supply discipline for
the sake of the industry? Better the industry do this than government impose
strictures, including well-intentioned but potentially disastrous export quotas or
levies.
The SA Coal Roadmap has already tasked itself with figuring out how coal mining will
operate in the teeth of the IRP 2010. In its worst-case scenario, the roadmap stated
that billions of tonnes of coal would be sterilised if no new power stations were built.
It could perhaps find for itself fresh momentum by unifying its concern regarding IRP
2010 in a way that also embraces the problems of declaring coal a strategic
resource.
