XAVIER Prevost, a veteran coal mining analyst at XMP Consulting, painted a bleak picture for South African’s coal sector saying under investment was threatening its position as one of the largest contributors to the industry.
“We don’t have the investments right now, [which means that] we cannot plan new projects or new mines – and that is the lifeline of the industry. We are not doing that well – we are actually decreasing production. And with this comes increasing costs, increasing prices and, therefore, everything is [affected],” Prevost was quoted to have said in online publication Consultancy.co.za.
“Export coal cannot grow until the present coal oversupply and Richards Bay Coal Terminal price decreases. It’s not working for them as a country, and economically, it’s actually a big problem in terms of producing energy or electricity at competitive prices,” he said.
Since 2009, net investment in coal has declined 10% a year to R3.8bn in 2017 from R7.3bn, according to the Minerals Council of South Africa. However, of South African mining’s largest sectors, coal recorded the only growth in employment in 2017, it said.
It was also the country’s largest contributor to foreign exchange earned by the mining sector.
