South Africa lacks coal export infrastructure says mining major Anglo American

Mining giant, Anglo American, has recently made a revelation in an interview that the country’s coal exporting capacity may have touched its peak with the Witbank – a large well-known coalfield in Mpumalanga province reaching its maturity.

The company’s management further added that, now the country’s coal future lies in the underdeveloped Lephalale-Waterberg basin (Limpopo) but the infrastructure required to export the coal is not in place.

However, given the competing economic needs as a country, it would take some time to invest in that infrastructure which is likely to affect the country’s coal exports in the coming years ahead.

The bulk of  South Africa’s coal production is from Mpumalanga’s Witbank region but the resources there are being depleted. By contrast, some of the Waterberg region’s coal reserves are as high as 75 billion tonnes, about 40% of all remaining reserves.

The market sources reveal that the Waterberg coalfield has only been marginally exploited because of infrastructural constraints such as inadequate road and rail capacity. Other constraints include the distance to the Richards’s Bay Coal Terminal  (key terminal for country’s coal exports) and inadequate water availability.

Anglo American spinning off its coal business

Last month, Anglo American has revealed its plans to exit coal mining in the country, in what is seen as a major shift away from carbon-intense operations.

The company has reasoned that it is working towards a possible de-merger of its thermal coal operations as a likely preferred exit option, adding that the process was expected in the next two to three years, with a primary listing in the JSE for the de-merged business.

The South African thermal coal exports have suffered badly this year due to COVID-19 lockdown in its key export destination, India. However, the miner says that the company’s move to diversify its business long before (almost 18 months ago) has placed it in a better position. Even before the pandemic happened, the company had started exporting coal to countries like Vietnam, South Korea, and Pakistan which helped it to mitigate the effect of the plunge in coal demand.