Modern Mining July 2022

in the queue of log-jammed regulatory approval processes. Earlier this year President Ramaphosa appointed mining stalwart Sipho Nkosi to cut the red tape and stimulate new investment into South Africa and, like the rest of the mining industry, Bayoglu has welcomed this undertaking. An additional challenge is Transnet Freight Rail, which is unable to satisfactorily ensure that products reach Richards Bay Coal Terminal (RBCT) within a reasonable timeframe. “Transnet’s inability to ensure the timeous delivery of products to the ports results in losses amounting to billions of rand. It is imperative that Transnet starts providing reliable logistical support to ensure on time shipment. Not doing so delays current orders to clients and could cause major reputational dam age to the industry. If South African coal suppliers become known as unreliable, coal users will likely to seek out more reliable sources of supply,” says Bayoglu. He adds that financial institutions are increas ingly adopting a hostile attitude towards financing the development of new coal mines, with an increas ing number of banking institutions deciding not to fund new thermal coal mines. This has forced coal miners to fund new project developments and

Eastern Europe. We believe the war has heightened countries’ awareness of the importance of diversify ing sources of supply to mitigate risks of shortage and having security of energy supply,” explains Bayoglu. This is good news for South Africa as it is a major coal-producing nation with many coal mines. “The country can easily service a portion of the global coal needs,” says Bayoglu, adding that “sev eral vessels from Europe have collected coal and anthracite from the Richards Bay Coal Terminal (RBCT) in KwaZulu-Natal, and more are expected to arrive in the coming weeks and months”. So important is coal as a revenue source to the country’s coffers that, according to the Minerals Council South Africa, it was the highest revenue earner for the country in 2020, contributing 21,4% of the country’s total mining revenue. Wading through the challenges facing coal miners Although South Africa has abundant sources of coal, the country remains challenged by a number of issues, including logistical and regulatory concerns which hamper the industry’s ability to benefit fully from the surge in demand for coal. Bayoglu explains that there are the massive bottlenecks in mining approval processes, ranging from the awarding of prospecting rights to water use licences and environmental authorisations. “For the most part, the red tape delaying devel opment of new projects is not the fault of the Department of Mineral Resources. The depart ments of Environmental Affairs and the Department of Water and Sanitation do not issue the necessary licences within the stipulated period and, owing to endless appeal processes, delay project develop ment. These delays result in the state losing out on massive revenue sources in the form of taxes from coal miners, says Bayoglu. The Minerals Council South Africa estimates that R90-billion in mining-related projects remains

ZAC is the sole producer of prime anthracite in South Africa.

Canyon Coal’s Khanye mine.

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