Modern Mining January 2024

COMMODITIES OUTLOOK

Rail status will dictate the performance of By Vuslat Bayoglu, Managing Director of Menar

South Africa’s coal industry will go into 2024 carrying a bag filled with promises from government to fix the Transnet impasse and congestion at the country’s ports. For the most part it appears that these issues have been a dominant factor in derailing, in the literal sense, the industry from reaching its true potential. Coal exports hit record lows during 2022 and 2023, as miners struggled to move product to the ports via rail. Shipments for coal at the Transnet terminal fell to 46.5 million tons in 2023, from 50.4 million tons in the previous year.

F ollowing his recent visit to the Transnet Port Terminal in KwaZulu-Natal, President Cyril Ramaphosa made some promises including dealing with port congestion along with the shortage of locomotives, incompetence, and a lead ership vacuum. In addition, things are unravelling at Transnet and the Richards Bay Coal Terminal has been performing far below its 91 million tonne capacity with daily rail deliveries dropping from 32 trains to 18. Ramaphosa emphasised that the private sector would play a piv otal role in finding a solution. If these promises are kept, the industry stands to be much better placed to achieve growth and stability. The ability to resolve these impediments will be a major deciding factor in how the sector performs going forward. The impact of the rail crisis pales in comparison to other factors such as geopolitical shifts, global green energy trends and price volatility. We cannot even begin to speak about global market behaviour if we are struggling to move cargo across our shores. In the background of South Africa’s rail woes, global markets continue to assume a different shape with strong growth in Asia and dwindling demand in the US and Europe. In 2020 the International Energy

Vuslat Bayoglu, Managing Director of Menar.

Agency (IEA) forecasted that coal’s future would rely heavily on the behaviour of countries like China, India, Indonesia, and Pakistan. Fast forward to 2023 and market trends seem to support this projection, with China, India and the ASEAN region expected to account for 76% of the world’s coal consumption in 2024. The challenges associated with discarding fos sil fuels like coal became apparent during the July G20 Energy Transition Ministerial Meeting in India, where Ministers from some of the world’s biggest

Below right: Operations unfolding at Canyon Coa’s Khanye Colliery in Bronkhorstspruit, Gauteng. Below: Coal being loaded at the Kangra mine siding in eMkhondo, Mpumalanga.

18  MODERN MINING  January 2024