South Africa’s largest coal producer-Exxaro Resources, has started work on one of the last substantial coal deposits remaining in the 100-year-old Mpumalanga coalfields.
The coal company has announced the establishment of its R3.3 Billion Belfast Implementation Project (BIP) in Mpumalanga during a sod-turning event.
The Belfast mine will be able to produce 2.7 MnT of good-quality thermal coal per annum for at least the next 17 years, starting in 2020, in the first phase of development. The company also foresees a potential for second-phase, depending on market conditions, which could take the life of mine to 30 years.
Apart from generating 6000 direct and indirect jobs during its construction and life, the coal mine is also the first of its kind in South Africa to have ‘digital twin’.
The ‘digital twin’ is a complete digital replica of the mine which will allow management and the contracted company to connect to and manage it from anywhere and the maintenance teams will be connected to certain machinery to analyse and pick up problems early – resulting in increased safety and reduced downtime.
While most of Belfast’s coal will be destined for export markets, for which Exxaro has sufficient allocation at Richards Bay Coal Terminal (RBCT), about 500,000 MT could also be sold in the local market.
Commenting on the prospect of possible destination of the coal, an official from Exxaro has said the coal could be sold to Eskom, if Eskom were to put out a tender for it. The closest power station is Arnot, to which the coal could be trucked. But it depends on Eskom’s requirements. If the coal is not sold locally, it would be exported as well, he added.
Belfast will produce a higher quality, clean-burning thermal coal for which there is quite a lot of demand as it has relatively low Sox and Nox emissions.
South African coal prices have witness upsurge on account of the prevailing supply tightness this year. Exxaro has said in its ‘pre-close’ message for the half year period, that API-4 index for coal which is currently hovering around USD 100 mark, is expected to remain at this level for the current year.
South African Coal Offers:
South African coal index API-4 increased by USD 3-4/MT from the previous week, was assessed at USD 107.9 as on 12 Jul’18. Market participants have cited the export tender from Tai power behind the reason for the rise in coal index.
Discount for 5500 NAR coal has been raised from USD 8-8.5/MT to USD 9.5-10/MT, while discount for 4800 NAR coal was USD 18/MT.
Prevailing offer for 5500 NAR coal was assessed at USD 90-91/MT, FoB Richards Bay, while 4800 NAR coal was offered at USD 71-72/MT, FoB Richards Bay.
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