COAL of Africa Ltd (CoAL) is considering entering the independent power producer (IPP) space to bring its mothballed Vele colliery into production. Coal prices and logistics costs rendered the mine uneconomic.The Vele mine in northern Limpopo has cost about R1bn and was supposed to be a soft coking coal and thermal coal operation. But coal prices fell because of sluggish economic growth in China and Europe, so CoAL opted not to bring the mine into production.“Global coal demand growth has fallen slightly, reflecting global weaknesses in industrial activity, particularly in China. The more recent falls in prices appear to be the result of what can be best described as a coal glut that is simply part of the cyclical nature of the industry, as well as smaller contributing factors,” Jeffrey Rae, chief economist at ITS Global, said recently.One of the options for Vele is to link it to an IPP scheme and CoAL wants to participate in the second round of IPP proposals, says CEO David Brown. ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.