Coal news and updates

MINERAL Resources Minister Susan Shabangu clashed publicly on Wednesday with senior coal executive Ian Hall over the issue of delays in getting the permits for new mines.

 

Anglo American’s Mr Hall said in his capacity as chairman of the steering committee for the South African Coal Road Map — a government and industry body — that it took at least three-and-a-half years to obtain the permits needed to start construction on a coal mine in South Africa.

 

Mr Hall said at the IHS McCloskey South African Coal Exports conference in Cape Town on Wednesday that the time frame had to be cut, given that new coal mines were urgently required to supply existing and new power stations.

 

Ms Shabangu criticised Mr Hall at question time, saying that the streamlining of the licensing process was "already happening".

 

"There’s a lot that has been done. The regulations will be defined soon. I am disappointed that you continue to present a gloomy picture of South Africa when we have made so much progress in this space."

 

In his presentation, Mr Hall said a number of long-term coal supply contracts with Eskom were coming to an end and the utility had "significant un-contracted" coal requirements from 2015, which would increase to 60-million tonnes "or more" by 2025.

 

"However, should you take a decision now to build a new coal mine, the earliest you can expect to get all the necessary permits in terms of the current regulations and processes is October 2017, and that’s assuming that there are no appeals or objections."

 

Mr Hall said this was because a mining firm had to jump "through three major hoops": the requirements to get a water-use licence, an environmental permit in terms of the environmental management act, and a mining right from the Department of Mineral Resources.

 

Ms Shabangu continued the government’s balancing act on the future of coal exports in her presentation.

 

Coal exports are crucial to the local industry’s profitability because the major coal groups use the higher profit margins on export sales to compensate for the lower profit margins on supplying Eskom. Coal producers are worried about the implications of imminent legislation declaring coal to be a strategic mineral.

 

The government is concerned about future supply to Eskom because of competition from the export market, particularly Indian power stations.

 

The industry fears the government may impose physical quotas on coal exports or apply taxes to limit export volumes.

 

Ms Shabangu said South Africa would continue to contribute coal to the export markets. "We will be in that space even if we do have coal as a strategic asset. But we also have to make sure that local supply is guaranteed for Eskom and other players."

 

Asked if no measures would be taken against coal exports, she said: "You can’t hold me to that."

 

 

Source: http://www.bdlive.co.za/