Notice: Undefined variable: os in /home/admin/domains/coalmandi.in/public_html/incl/visiterclass.php on line 164

Notice: Undefined variable: device in /home/admin/domains/coalmandi.in/public_html/incl/visiterclass.php on line 165
Challenges with Chinese Suppliers and Underinvestment Impact South Africa's Coal Industry

Download App
 

Challenges with Chinese Suppliers and Underinvestment Impact South Africa's Coal Industry

Posted on : 19-07-2023 | Author : Cameron Mackay

Photo by Creamer Media

Addressing the challenges faced by the entity, she highlighted the ongoing dispute with CRRC, infrastructure underinvestment, and security-related issues, which are significantly impacting operations.

Due to the current impasse with Chinese suppliers, we are experiencing a loss of approximately 18.5 million tonnes per year," Mzimela stated. She emphasized that locomotives, especially those of Chinese design, are specific to certain corridors, making it challenging to utilize locomotives from other corridors on the coal route.

While improvements can be made with our existing fleet to enhance reliability, a Chinese solution would enable us to achieve more accurate delivery of 3.9 million tonnes. We have reached an agreement with Chinese suppliers that if we can resolve the current impasse, they will assist us in improving the reliability of the locomotives currently in operation," she added.

TFR has faced difficulties in securing spares to maintain the operational status of the more than 450 electric locomotives and 22 diesel locomotives supplied by CRRC. As a result, coal miners are encountering significant challenges in transporting their products for export via the Richards Bay Coal Terminal.

Earlier this year, Public Enterprises Minister Pravin Gordhan travelled to China to help resolve the dispute with CRRC.

In the meantime, IH Energy director Ian Hall stated that South Africa possesses sufficient coal resources to increase exports until 2035 while transitioning to greener and more renewable energy sources. However, this would necessitate improved performance by TFR.

Despite constraints faced by coal miners, including reluctance from investors to support coal-related projects, Hall emphasized that South Africa still has abundant coal resources, with approximately 95 billion tonnes available. He noted that several state-owned Eskom power plants are slated for decommissioning, resulting in a decrease in coal demand. Nevertheless, South Africa could export at least 70-80 million tonnes of coal until 2035 and even beyond.

Hall also discussed the seaborne trade coal market, which accounts for approximately one billion tonnes of coal annually but is expected to decline by 2035-2040. He pointed out that South Africa's coal exports have lagged behind countries like Indonesia and Australia, but with proper strategies, the country can benefit economically from its coal resources.

Increasing coal exports to 73 million tonnes could have a positive impact on the country's GDP, potentially creating around 180,000 jobs. This would be significant considering that the coal industry currently employs 90,000 people and would help mitigate challenges associated with the transition to cleaner energy sources.