Modern Mining January 2023

quest for continued growth, mean that coal demand will continue. China has no appetite for losing its status as the world’s biggest manufacturing zone. It is largely driven by realism. Even without these considerations, the IEA pro jected that coal consumption in China would increase by 1%, which equates to 43 million tons in 2023. The IEA noted, however, that given the wide use of coal across the economy, this forecast is subject to many uncertainties, such as economic growth, hydropower output or the evolution of heavy industry. Meanwhile, coal demand in India is expected to increase, driven by expanded electrification and economic growth. In the IEA’s forecast, Indian coal demand is expected to grow by 3% to 1.16 billion tons in 2023. The IEA notes that the near-term future for EU coal consumption is uncertain, given the volatile situation with Russian gas flows. In its forecast, the expansion of renewables and energy-saving mea sures in 2023 may be sufficient to offset expected nuclear power plant closures. Assuming a higher availability of nuclear power plants in France than in 2022, the IEA forecasts a decline of 4 million tons in EU coal demand in 2023. The IEA notes that coal consumption in the EU was expected to rise by 7% in 2022, which comes in addition to 2021’s 14% increase in coal usage. This is being driven by demand from the electricity sec tor where coal is increasingly being used to replace gas, which is in short supply and has experienced substantial price spikes following Russia’s invasion of Ukraine. Several EU countries are extending the life of coal plants scheduled for closure, reopening closed plants or raising caps on their operating hours to reduce gas consumption. European countries such as Denmark, the UK, Italy, Germany and others are once again buying coal from South Africa. That demand continued while COP27 was sitting in Egypt. Germany has been lauded as a global pioneer in applying renewable energy and environmental technologies. According to news agency Reuters, renewable energy accounted for 49% of German power consumption in the first half of 2022, largely

sourced from wind, solar, biomass and hydroelectric sources. However, Germany’s soaring energy prices and the failure of renewables to plug the gap left by restricted gas supplies from Russia, offer a caution ary warning to South Africa, which has accepted loans to fund installation of renewable energy supply and ditch its coal-fired fleet of power plants. We should not forget that South Africa has the sixth largest coal resource in the world – equivalent

The campaign against coal will intensify following COP27 in Egypt.

to about 170 years of coal reserves remaining – and over 80% of the country’s energy is produced from coal-fired power stations. The country only has around 6 000 MW of installed renewable energy capacity and this variable capacity has not stopped load-shedding.

We should not forget that South Africa has the sixth largest coal resource in the world – equivalent to about 170 years of coal reserves remaining – and over 80% of the country’s energy is produced from coal-fired power stations.

The South African Government has committed to allow for the instal lation of more renewable supply. The adoption of the energy transition plan, backed by developed nations, has set the tone at the highest echelons of gov ernment that could result in declining investment in new coal mines. This risk is that, as reality, rather than idealism, dictates terms, we might find ourselves with fewer operational mines and higher coal prices for Eskom and export. But since some prefer to believe by observation, we might have to wait for realism to discipline our idealism. 

Several EU countries are extending the life of coal plants scheduled for closure.

January 2023  MODERN MINING  21