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Sibongile Khumalo
 Anglo American says the country’s coal exporting capacity may have reached its peak with the Witbank coal belt in Mpumalanga reaching its maturity.

“The future of our coal in SA is in the Lephalale-Waterberg basin (Limpopo),” July Ndlovu, Anglo American Coal CEO, said in an interview with FIN24 Speaks, adding that the infrastructure required to export the coal was not in place.

Some of the Waterberg region’s coal reserves are as high as 75 billion tonnes, about 40 percent of all remaining reserves.

“Given our competing economic needs as a country, it would take us sometime to invest in that infrastructure.”

In May, Anglo American revealed that it plans to exit coal mining in the country, in what is seen as a major shift away from carbon-intense operations. The company said it was 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 on the JSE for the de-merged business.

The company in March 2018, announced that it had completed of the sale of its Eskom-tied domestic thermal coal operations to Seriti Resources, in a deal worth R2,3 billion.

Anglo American Coal said diversifying its export markets away from India helped it navigate the impact of economic impact of Covid-19 lockdown.

South Africa’s export coal market was heavily impacted by the slump in demand due to a hard lockdown implemented by India, which is a major destination for local coal. But a move taken by the miner diversify its export markets placed in a better position, Ndlovu said.

“We took a decision about a year or 18 months ago to diversify our market, we started selling some our coal to markets like Vietnam, South Korea and Pakistan. As a consequence of that, we were able to significantly mitigate the demand shortfall.”

“As economies are beginning to come out of the lockdown, we could start to see demand picking up. Prices suffered quite heavily, but they have somewhat recovered. . . but we are nowhere near where we need to,” said Ndlovu.

Although Anglo American no longer supplies Eskom with coal, the state-owned power generator, which is the biggest coal user in the country, informed miners in April that it won’t take deliveries as a result of lower demand caused by the national lockdown in late March.

Carbon intensive industries around world are under increasing pressure to reduce CO2 emissions, as part of plans to mitigate the damaging effects of climate change. Renewable energy sources are increasingly seen as an alternative coal-generated electricity, which is the mainstay of many developing economies including South Africa.

Like other mining companies around the country, Anglo’s coal operations are ramping up production following the easing of lockdown regulations, with open-cast mines operating at full capacity. – fin24.com