South Africa: Boost coal export efficiency as competition ramps up, says Seriti

South African coal producers will need to boost efficiency as competition intensifies in coal export markets, says Mike Teke, CEO of black-owned and controlled coal mining company, Seriti Resources.

As many Western countries shift their focus towards renewable and alternative energies, countries such as the US, Australia and Colombia are upping their game for a slice of the coal pie in the East, particularly China and India.

“Competition is continuing to intensify in the export markets and that means for us in South Africa we need to ensure we stay competitive and efficient in our exports. The global energy transition is affecting us as a country and as a producer,” Teke told the Southern African Coal Conference in Cape Town.

Coal exports from the Richards Bay Coal Terminal totalled 72-million tonnes in 2019, down from 73.5-million tonnes in 2018, and 76.5-million in 2017. The largest share of South Africa’s coal exports went to India in 2019. Teke said coal is forecast to continue playing a key role in most Third World countries.

Teke said there was room to improve efficiency with Transnet, while coal producers also need to embrace new technology.

“We can’t control exchange rates. The things we can control are productivity and technology. We need to be better than the best.”

He said the US was upping its game in exporting coal. The US Presidential elections this year could also spark a major change in policy if it resulted in a win for the Democrats.

“If the Democrats win, the challenge is they will shut coal-fired power plants, but their mines will continue to operate, and they will compete with us in exporting to the East.”

Former New York mayor, Michael Bloomberg, who is running for President, has said that if he wins the Presidency, he would block new natural gas and get rid of coal in a bid to stem emissions and halt more climate change.

“We know the US is going to compete to push coal into markets. Columbia is also there. A number of countries which are retiring their coal-fired plants will continue to mine and export,” said Teke.

Teke called for strong collaboration between different governments in dealing with the coal sector.

“Collaboration, and I mean strong collaboration, among different government departments and the private sector is now urgent to ensure that the transition is delivered successfully.”

Teke appealed for support for embattled Eskom.

“Now is the time. We have new leadership at Eskom. What option do we have if we don’t help Eskom? We need to have all hands on deck from everyone in this country. We are reaching a stage where we can’t just laugh and criticize and do nothing. This is about national interest and our national duty.”

Last November, Seriti Resources concluded an acquisition agreement with South32 to acquire South32’s 91.385% shareholdling in South Africa Energy Coal (SAEC). The deal includes four collieries in Mpumalanga – Khutala Colliery, Klipspruit Colliery, Middelburg Colliery and Wolverans Colliery, as well as three processing plants.
Source: Mining Weekly