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Wednesday, 14 October 09
SA'S COAL OUTPUT LIKELY TO RISE BY 2011, BOOSTED BY WATERBERG MINES


Mining weekly reported that, South Africa's coal production will struggle to meet demand over the next few years, but coal production could likely be on the upward trend by 2011 if new mines are opened in the Waterberg coalfield, despite the environmental and logistical constraints the industry is facing, growth consultancy firm Frost & Sullivan highlighted on Tuesday.

The firm said that the global consumption of coal is expected to increase by 4% a year between 2010 and 2030 in line with the rising global demand for energy.

To boost production, the South African coal mining industry would have to open up new mines in the Waterberg coal basin to replace the depleted mines in the Highveld, Witbank and Ermelo coalfields, in Mpumalanga province.

"The Waterberg coal basin, which currently has one operating colliery, represents the future of electricity generation and coal mining in South Africa," Frost & Sullivan metals and mining analyst Wonder Nyanjowa commented in a statement.

Diversified miner Exxaro operates the Grootegeluk mine in the Waterberg and junior miner Firestone and its joint-venture partner, Sekoko Coal, are planning to start mining in the region by the end of the year.

"South Africa's coal mining industry remains unbalanced, with rising coal demand on one hand and constrained supply sources on the other... the country's available supply capacity may not be able to cope with the upsurge in demand," he said.

The expansion of power utility Eskom's electricity generation capacity, together with petrochemicals company Sasol's capacity expansion plans, is set to increase South Africa's coal consumption by 75-million tons a year.

However, coal supply will remain stagnant, the firm stated.

"Limited rail and port facilities at [the] Richards Bay Coal Terminal are expected to slow the growth of South Africa's coal exports," Nyanjowa warned.

"Growth prospects will further be hampered by tightening environmental laws in many parts of the developed world," he added.

Increased calls by the US and other developed countries for a moratorium on the continued use of coal-fired power stations would also dampen export demand for South Africa's coal in international markets.

"The South African coal-mining industry needs to position itself well in order to meet the increased demand for coal in domestic and international markets," he concluded.
Source:Mining Weekly



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