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Granted, demand for coal both at home and abroad may well offer the strategic and industry logic to pour money into these projects. To begin with, Eskom, which feasts on coal to keep our lights on, is unlikely to lose its position as the largest consumer soon.
Then there’s our heavy industry — steel and cement producers — who need the coal for their furnaces and robust processes, all contributing to our industrial life. Let’s not forget the international market, to which SA ships about 30% of our coal. Key markets include Asia and Europe, where countries such as India and China remain big consumers.
But here is the twist: more and more investors are hesitant to pour money into new coal ventures, especially thermal coal, due to advancing decarbonisation policies and financial institutions’ reluctance to back carbon-intensive projects. Insurers are also shy to cover new coal projects, with premiums skyrocketing or coverage becoming unavailable.
It’s a high-stakes gamble, a race at the three-legged mercy of Eskom and coal-hungry heavy industries and international markets against the surging wave of the global clean energy transition.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
EDITORIAL: High-stakes coal gambles
Our coal industry is making its last stand, armed with more than 40-million tonnes valued at more than R80bn at current prices. The timing couldn’t be more interesting, as the world rapidly shifts away from fossil fuels and towards greener alternatives. Yet, here we are, standing firm in the belief in a coal future.
Granted, demand for coal both at home and abroad may well offer the strategic and industry logic to pour money into these projects. To begin with, Eskom, which feasts on coal to keep our lights on, is unlikely to lose its position as the largest consumer soon.
Then there’s our heavy industry — steel and cement producers — who need the coal for their furnaces and robust processes, all contributing to our industrial life. Let’s not forget the international market, to which SA ships about 30% of our coal. Key markets include Asia and Europe, where countries such as India and China remain big consumers.
But here is the twist: more and more investors are hesitant to pour money into new coal ventures, especially thermal coal, due to advancing decarbonisation policies and financial institutions’ reluctance to back carbon-intensive projects. Insurers are also shy to cover new coal projects, with premiums skyrocketing or coverage becoming unavailable.
It’s a high-stakes gamble, a race at the three-legged mercy of Eskom and coal-hungry heavy industries and international markets against the surging wave of the global clean energy transition.
Deal-making in thermal coal sector drying up
SA coal industry bets big with 44-million tonnes a year in new projects
Miners set to shrink carbon footprints
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.