An international survey conducted by the Belt and Road Investment (BRI) initiative, released in April 2019 concluded that most South Africans want foreign investment in electricity generation to be in renewables and not in coal. The split was convincing, with 80 percent of South Africans surveyed choosing renewables. Countries from Europe, Asia, the Middle East, Latin America, and Africa who are benefitting from China’s Belt and Road Investment (BRI) initiative were involved in the survey. One month later we ask the question, “What is the future of coal in South Africa?”.
Firstly, we have to understand that coal plays a pivotal role in African economies, especially South Africa. With concerns rising at the declining of investment in the coal sector, experts still agree there is a need for coal. Sugarbush Consultancy’s, Karin van Deventer, who has over 20 years of coal geology experience. Van Deventer’s experience covers exploration, project management, operational geology and geological information management and was interviewed to get her opinion on the future of coal. Van Deventer is an industry leader in coal, especially in South Africa. Van Deventer serves on several committees, including SAMREC and has held talks and lectures at the Fossil Fuel Foundation (FFF).
Van Deventer believes she has seen a growth in the local small mining industry in Mpumalanga, despite a downward trend in the coal export price and efforts to move away from fossil fuels. Karin stated, “Coal still is economical, it creates jobs and it upskills the workforce.” Small mining operators struggle to acquire funding, and without it, the correct detailed studies cannot be conducted to build a robust economical mining plan. “Operators often venture into the operational phase with very little basic information on the expected geology and mining conditions. The operator often works from hand to mouth and it is difficult to maintain stable production rates”, says Van Deventer. This creates a vicious cycle as the operator is left with debt as the correct detailed studies were not conducted.
The South African government has a plan for energy projection up to 2030. The hope is that an additional generating capacity of 9.5 GW of wind, 6.8 GW of solar, 6.7 GW of coal, and 2.5 GW of hydropower will be available by that time. This would still mean that South Africa would still be acquiring 64% of its power from coal.
Coal will continue to be an integral part of the South African economy, having a lower levelized cost of electricity (LCOE) than renewables and is still the cheapest baseload technology. Even though there has been a sharp decline in the use of coal over the last few years, South Africa still sees around 80% of its electricity requirements coming from coal. Coal is one of South Africa’s most important resources and it is helping to industrialise and support the growth of the South African economy, therefore the correct measures need to be put in place to protect the small-scale miners and nurture the commodity itself.
