Eskom’s current coal supply strategy is to increase the supply of coal from Emerging BEE Coal Mines. But is this possible?
Junior Miners are companies with an asset base of R50 million to R7 billion. Those above R7 billion are regarded as the majors, below R50 million are small scale miners and below the small scale miners are the artisanal miners. (SAMDA)
The Coal Industry contributes some 70% to the South African Energy Economy and will continue to play a major role for the generation of electricity, production of synthetic fuels and the export market well into the future. Costly alternative electricity, such as wind and solar, will not be able to reduce the demand for coal significantly in South Africa in the foreseeable future.
It is anticipated that Eskom will require some additional 4 billion tons of coal over the next thirty years. This is approximately equivalent to 133Mtpa with a capital requirement in the order of R100b to establish new mines.
This increased demand by Eskom represents at least 10% of the remaining National Coal Reserve but where will the additional tons come from?
Emerging Miners are required to provide a reliable and sustainable supply of coal as their contribution to keeping industry rolling. Junior miners are able to exploit small deposits all over the country that larger coal mining companies would not consider suitable due to the high operating costs involved.
However new entrants to the market face many challenges. Many inappropriate business decisions are often taken by Junior Miners as a direct result of an inadequate skills and knowledge background.
Many new entrants to the markets are making use of consultants and too often have wasted good money on inappropriate professional services or bad outcomes.
A co-ordinated strategy in providing a ‘One Stop’ Facility is urgently needed to assist the new entrants.
‘An opportunity must be created where Junior Miners can obtain the correct and appropriate information from an ‘Accredited Body’. Here consultants can register as Service Providers and the Junior Miners can be assured of the required professional service’, says Gerhard Esterhuizen an independent consulting geologist.
With this in mind the Fossil Fuel Foundation established the Junior Coal Miners Group in 2000.
A new Infrastructure Concept for Coal Mining developments is waiting in the wings. This model is applicable to large coal fields and is based on a shared integrated logistic system.
‘The application of the concept could be extended to coal fields where Junior and Major Miners are operating simultaneously. This opens up the opportunity for Junior Miners to access large markets’ says Lyonell Fliss, a specialist in the design of Mining civil infrastructure with special expertise in the Coal Mining sector.
Mining followed by beneficiation to produce export grade coal often allows for the production of a lower grade ‘middlings’ product and it is this product that is suitable for much needed domestic electricity generation.
The potential to generate multiple products from such coal mines, some for export to the global market and others for local requirements, provides further economic incentives for this emerging sector.
Many challenges face the Emerging Coal Mining sector. The time has now come to focus on those issues in order to enable the Emerging Miners to play their role as key contributors to the South African economy.
According to the South African Coal Roadmap, the development of new mines is fundamental in ensuring existing coal-fired power stations remain in operation.
The FFF seeks to provide a platform for networking, discussion, support and collaboration, emphasize the role Junior Coal Miners play in the current energy issues in South Africa, provide key government department inputs into supporting and facilitating the efficient operation of the Junior coal mines and to identify workable solutions to challenges currently being faced by them.