South
Africa's indigenous energy resource base is dominated by coal.
Internationally, coal is the most widely used primary fuel,
accounting for about 36 percent of the total fuel consumption
of the world's electricity production. About 77 percent of
South Africa's primary energy needs are provided by coal.
This is unlikely to change significantly in the next two decades
owing to the relative lack of suitable alternatives to coal
as an energy source. Many of the deposits can be exploited
at extremely favourable costs and, as a result, a large coal-mining
industry has developed.
In addition to the extensive use of coal in the domestic economy,
about 28 percent of South Africa's production is exported,
mainly through the Richards Bay Coal Terminal, making South
Africa the fourth-largest coal exporting country in the world.
South Africa's coal is obtained from collieries that range
from among the largest in the world to small-scale producers.
As a result of new entrants, operating collieries increased
to 64 during 2004. Of these, a relatively small number of
large-scale producers supply coal primarily to electricity
and synthetic fuel producers.
About 51 percent of South African coal mining is done underground
and about 49 percent is produced by open-cast methods. The
coal-mining industry is highly concentrated with five companies
accounting for 85 percent of saleable coal production.
These companies are:
. Ingwe
Collieries Limited, a BHP
Billiton subsidiary;
. Anglo
Coal;
.
Sasol;
. Eyesizwe; and
. Kumba
Resources Limited, accounting for 85 percent of the saleable
coal production.
Production is concentrated in large mines, with 11 mines accounting
for 70 percent of the output. South African coal for local
electricity production is among the cheapest in the world.
The beneficiation of coal, particularly for export, results
in more than 65Mt of coal discards being produced every year.
About 21 percent of the run-of-mine coal produced is exported,
and 21 percent is used locally (excluding power-station coal).
The rest is not saleable and is discarded.
The remainder of South Africa's coal production feeds the
various local industries:
. 62 percent is used for electricity generation;
. 23 percent for petrochemical industries (Sasol);
. 8 percent for general industry;
. 4 percent for the metallurgical industry (Mittal); and
. 4 percent is purchased by merchants and sold locally or
exported.
The key role played by South Africa's coal reserves in the
economy is illustrated by the fact that Eskom ranks first
in the world as a steam coal user and seventh as an electricity
generator. Sasol is the largest coal-to-chemicals producer.
By international standards, South Africa's coal deposits are
relatively shallow with thick seams, which make them easier
and, usually, cheaper to mine. At the present production rate,
there should be more than 50 years of coal supply left.
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