Coal mining in southern Africa to increase due to energy demand

coal-RDKAccording to Frost & Sullivan, South Africa will continue to dominate as the region's largest coal producer in the coming days. (Image source: Oatsy40/Flickr)Research and consultancy firm Frost and Sullivan has forecast that the rising demand for energy and new power projects in southern Africa, along with escalating costs of coal, could lead to an increase in mining activity in the region in the near-term

According to Frost & Sullivan, demand for coal and mining activity is also likely to improve due to infrastructure projects like rail and ports developments in the region.

“Despite environmental concerns, coal continues to play an important role in the energy mix of many countries, which use it for electricity generation, and as feedstock for synthetic fuels and steel manufacturing. Coal is expected to account for nearly 69 per cent of the total global energy consumption in 2030,” Frost & Sullivan said.

Data from Frost & Sullivan shows that southern Africa had 53 coal expansion projects in 2012, worth about US$45.6bn and the total coal production in the region stood at 266.1mn tonnes. Part of this production was used for exports to Europe, India and China. Coal production is expected to touch 308mn tonnes by 2018.

Frost & Sullivan analyst Wonder Nyanjowa said, "As the market grows, South Africa is poised to consolidate its lead as the largest coal producer in southern Africa despite the depletion of the country's Witbank, Ermelo and Highveld coal mines."

The analyst added that Mozambique is likely to overtake Zimbabwe as the region's second largest coal producer in the coming days.

“However, mining companies in these countries are still operating at sub-optimal production levels as southern Africa needs more investments in electricity generation infrastructure,” Frost & Sullivan said.

Hence, public-private sector partnerships are essential, which would ensure continued growth of South Africa’s coal mining industry in the future, the company added.

It pointed out that mining companies could also retain more skilled professionals by raising compensation packages for engineers and other technicians.

 

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