Upload
informa-australia
View
288
Download
4
Tags:
Embed Size (px)
DESCRIPTION
Xavier Prevost, Senior Coal Analyst, from XMP Consulting South Africa has presented at the Botswana Coal and Energy Conference. If you would like more information about the conference, please visit the website: http://bit.ly/13MkVsy
Citation preview
A review of Southern Africa thermal coal markets
A review of Southern Africa thermal coal markets
1. World Overview
2. South African Coal Reserves 2013
3. Central Basin and Limpopo Coalfields
4. The “Big Five” and Junior Coal Mines
5. SA Coal chain, from production to discards
6. Coal Prices and their impact in the market
7. Exports – where to now?
8. Transnet – old and new rail lines
9. Inland market Eskom, Sasol and other users
• trends and prices
Energy is the source of industrialisation!
Coal provides over 41% of
the world’s energy
requirements.
Coal in electricity generation 2011
Source: World Coal Association 2011
0 10 20 30 40 50 60 70 80 90 100
Botswana
Mongolia
South Africa
Poland
China
Australia
Kazakhstan
India
Czech Republic
Morocco
Denmark
Zimbabwe
USA
Korea
Germany
UK
Turkey
Japan
Netherlands
Vietnam
Russia
Canada
France
%
Coal plays a vital role for energy production. Globally, coal accounts for 41% of the world’s electricity generation. It is the key player for generating electricity on nearly every continent and is the foundation of energy production in both developed and developing countries. The graph to the right, reproduced from the IEA Electricity Information, 2011, shows the countries that rely on coal to produce electricity; many of these countries rely primarily on coal. In addition, new coal-fired power plants are being constructed today; there is no doubt that coal will remain an important part of the energy mix.
World coal growth 1970 – 2011
Global poor figures compared to EU population
Importance of coal in South Africa - 2012 statistics
South Africa is the; – 7th largest producer of steam coal in the world - 250.3Mt
– 4th largest consumer of steam coal - 178.7Mt
– 5th largest exporter of coal - 73.4Mt
– Has 5% of world’s hard coal reserves (6th largest reserves)
Coal accounts for; – 1st highest foreign exchange earnings in the country
– 2nd largest mining income earner commodity, beating gold
– 93% of SA energy production
– >90% of carbon reductants in the metallurgical industry
– >40% of petrol and diesel requirements
– >200 major chemicals for 1000s of carbon-based products
South Africa’s coal reserves in the world context
8
35%
28%
11%
10%
7%
5% 3% 0.7%
World Hard Coal Proven Recoverable Reserves
North America
China
India
Russian Federation
Australia-Oceania
South Africa
Europe
Colombia
Coal reserves in South Africa
Coal reserves by province
1982 - 58.4 Bt (de Jager)
2012 - 32.4 Bt est. (MB)
• CENTRAL BASIN - 69.5% - Bituminous Steam
Witbank, Highveld, Ermelo Coalfields
Steam, petrochemical, export, industry
• KWAZULU NATAL - 3.6% - Bituminous,
Anthracite Coking, anthracite, lean
Bituminous.
• LIMPOPO – 21.3% - Bituminous, Soft coking,
PCI, Steam, export
• V-SASOLBURG – 5.1% - Bituminous Steam
COALFIELDS OF SOUTH AFRICA
N
INDIAN OCEAN
ZIMBABWE
BOTSWANA
LESOTHO
SWAZILAND
MO
ZA
MB
IQU
E
Nongoma
Vryheid
Ladysmith
Standerton
Volksrus t
UtrechtNewc astle
2
7
1312
14
16
17
Ermelo
8
Molteno
Potgietersrus
Springs
Pretoria WitbankBelfast
Vereeniging
Bloemfontein
Thabazimbi
Richards Bay
Durban
5
10
NORTHERNCAPE
EASTERN CAPE
FREE STATE
NORTH WEST PROVINCE
LIMPOPO PROVINCE
MPUMALANGA
KWA ZULU NATAL
GAUTENG
1
3
4
6
11
9
Welkom
18
19Indwe
COALFIELD
1) Tuli (Limpopo) 2)
3) Mopane (Western
4) Tshipise (Central
5) Venda-Pafuri (Eastern 6) Springbok Flats 7)
8) 9) Free State
10) 11) South Rand
12)
13)
14) 15)
16) 17)
18) Somkele19) Molteno -Indwe
Waterberg
Soutpansberg)
Soutpansberg)
Soutpansberg)
Witbank
Kangwane
Vereeniging - Sasolburg
Highveld
Ermelo
Klip RiverUtrecht
VryheidNongoma
15
SA coal reserves - 2012
29%
25% 21%
13%
5%
2.2%
1.7%
1.6% 0.8% 0.4%
0.3%
0.01%
HIGHVELD WITBANK WATERBERG *
ERMELO VRG.-SASOLBURG SOUTH RAND
UTRECHT KLIPRIVIER SOUTPANSBERG
KANGWANE VRYHEID NONGOMA
COALFIELDS OF SOUTH AFRICA
N
INDIAN OCEAN
ZIMBABWE
BOTSWANA
LESOTHO
SWAZILAND
MO
ZA
MB
IQU
E
Nongoma
Vryheid
Ladysmith
Standerton
Volksrus t
UtrechtNewc astle
2
7
1312
14
16
17
Ermelo
8
Molteno
Potgietersrus
Springs
Pretoria WitbankBelfast
Vereeniging
Bloemfontein
Thabazimbi
Richards Bay
Durban
5
10
NORTHERNCAPE
EASTERN CAPE
FREE STATE
NORTH WEST PROVINCE
LIMPOPO PROVINCE
MPUMALANGA
KWA ZULU NATAL
GAUTENG
1
3
4
6
11
9
Welkom
18
19Indwe
COALFIELD
1) Tuli (Limpopo) 2)
3) Mopane (Western
4) Tshipise (Central
5) Venda-Pafuri (Eastern 6) Springbok Flats 7)
8) 9) Free State
10) 11) South Rand
12)
13)
14) 15)
16) 17)
18) Somkele19) Molteno -Indwe
Waterberg
Soutpansberg)
Soutpansberg)
Soutpansberg)
Witbank
Kangwane
Vereeniging - Sasolburg
Highveld
Ermelo
Klip RiverUtrecht
VryheidNongoma
15
Coalfields of the Limpopo Province
Springbok Flats
Waterberg
Mopane
Tuli Pafuri
Tshipise
South Africa’s coal production in the world context
45.2%
13.1% 7.6%
5.4%
5.9%
4.3%
3.3% 2.5%
1.8%
2%
1.1%
1%
0.9% 0.8% 0.8% 0.7%
5%
China United States
India Australia
Indonesia Russian Federation
South Africa Germany
Poland Kazakhstan
Colombia Turkey
Canada Ukraine
Greece Czech Republic
Other
Coal production Run-of-Mine
o Most of steam coal for export and domestic markets is produced by 8 mega-mines, with more than 10Mtpa, 7 in the Central Basin, our main producing area. The remaining one in the Waterberg, where most of SA’s coal resources are. The later also produces a small amount (20%) of coking and metallurgical coal.
o KZN Coalfields have only four small mines, all producing anthracite mainly used as a reductant in the metallurgical industry. Most of the previously operating mines, including some producers of hard coking coal have closed down.
o The V-Sasolburg Coalfield has two mines, with the lowest coal quality in the country. The rest of the coal resources in the south (Free State) contain even higher ash.
o The only mine producing hard coking coal is in the Soutpansberg Coalfield (Limpopo Province).
o Molteno-Indwe Coalfield in the Eastern Cape has now a mine. It has very young coal to be used as local thermal coal or for exports.
29%
25% 21%
13%
5%
2.2%
1.7% 1.6%
0.8%
0.4%
0.3%
0.01%
HIGHVELD WITBANK WATERBERG *
ERMELO VRG.-SASOLBURG SOUTH RAND
UTRECHT KLIPRIVIER SOUTPANSBERG
KANGWANE VRYHEID NONGOMA
Coal production by company Anglo, Exxaro, Sasol, BHP and Xstrata have
77% of the coal market share in South Africa
23.6%
16.1%
14.7% 14.7%
8.1%
6.8%
4.4%
2.6%
2.5% 1.3%
1.2% 1.1% 1%
0.7% 0.6
0.3
Anglo Exxaro Sasol BHP Billiton
Xstrata Juniors Optimum Umcebo
Shanduka Sudor Kangra Stuart
Total CoAL Kuyasa Anker
o There is very little fragmentation in the mature South African coal industry as big players like Anglo, Exxaro, BHP Billiton, Sasol and Xstrata are in control of the largest mines.
o Exxaro, with large resources, has the only two operating mines in Limpopo – Grootegeluk in the Waterberg and Tshikondeni in the Soutpansberg ‘s Pafuri Sector.
o The importance of the BEE mines is now emerging as they produced more than 30%. Exxaro ‘s Grootegeluk mine is the second largest producer, soon to almost duplicate production as mine expansion is implemented.
The SA’s Coal Chain 2012 15
Run-of-Mine Production
311.2Mt
“Washing”
“Screening”
Discards
51.8Mt
189Mt
122.2Mt
Stocks
1Mt
Synfuels 42.2Mt
Electricity 120.8Mt
Local Use 24Mt
Exports 73.4Mt
50.4Mt 2.2Mt 40Mt
1.4Mt 40Mt 80.8Mt
SA’s thermal coal inland market prices
16
Coal
specifications Unit
Lower Ash A -
grade
Lower Ash B -
grade
Higher Ash C-
grade
Higher Ash D-
grade
Higher Ash
Minus D-grade
Calorific
Value MJ/kg 27.5 - 28.5 26.5 - 27.5 25.5 - 26.5 < 24.5 < 22.5
Volatile
Matter % >27 >25 >24 >20 >18
Ash content % 7 - 15 12 - 17 17 - 22 18 - 30 18 - 35
Inherent
Moisture % <4 <4 <6 <7 <7
Total
Moisture % <10 <10 <10 <10 <10
Total Sulphur % <1 <1 <1 <1 <1
Fixed Carbon % By difference By difference By difference By difference By difference
Price/ton
FOT R R640 R550 - R640 R450 - R500 R350 - R450
R9.50 -
R11.50/GJ/t
SA’s Thermal coal market 2012
17
66%
23%
9%
2%
POWER GENERATION SYNTHETIC FUELS
INDUSTRIES METALLURGY
USER ktpa
POWER GENERATION 120 774
SYNTHETIC FUELS 42 234
INDUSTRIES 16 520
METALLURGY 4 513
TOTAL 184 041
SA’s exports 2012
18
70% 23%
4% 2% 1%
FAR EAST/ASIA EUROPE
MIDDLE EAST AMERICAS
AFRICA & ISLANDS
The EU, once main market for SA exports, has fallen to just above 20% of our exports, while the Far East has grown to almost the same size the EU market was in 2007. Future trends focus on China and India, while the EU market is losing its attractive for thermal coal exporters.
Platts ICR thermal coal marker – NW Europe
19
20
60
100
140
180
220
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Platts ICR thermal coal marker – Asian
20
0
40
80
120
160
200
240
Fe
b-9
8
Fe
b-0
0
Fe
b-0
2
Fe
b-0
4
Fe
b-0
6
Fe
b-0
8
Fe
b-1
0
Fe
b-1
2
Transnet Coal System Proposal
21
303.6 Mt Discards 51.8 Mt
Electricity 120.8 Mt
Exports 64.0 Mt
SA’s future energy resources
• Despite the requested increase in renewable energy sources,
“the reality is that fossil fuels still provide the major share of
power generation with coal alone accounting for 41% of the
world’s electricity, a situation that will not change in the near
term”. International Energy Agency October 2011
• With a potential delay of two years or more in the South African
nuclear programme, i.e. a loss of 3.6GW, what can fill the
gap? Only Coal on top of the 19GW in the current programme. D
Collins, Oct 2011
• Renewables at present comprise approximately only 1% of
the power generated in the country. Business Day October 2011
22
303.6 Mt Discards 51.8 Mt
Electricity 120.8 Mt
Exports 64.0 Mt
23
Coal mining in South Africa
Coal mining provides jobs for the long-term.
According to the DMR, coal mining provided more than 85 000 jobs in 2012, this figure will increase, as more junior mines are opened in the future.
Coal mining jobs fuel other jobs.
For every coal mining job, many more additional are created elsewhere as coal is the mainstay of the economy. In other words, coal mining keeps millions of people – including coal miners – on the job – supporting themselves and their families.
Coal mining jobs are relatively well paid.
If mines were eventually closed down, all those jobs will be lost, increasing unemployment and poverty.
Coal is abundant and affordable.
Coal supplies 93% the electricity consumed by SA. Electricity from coal costs, in spite of the recent increases, are among the lowest in the world.
303.6 Mt Discards 51.8 Mt
Electricity 120.8 Mt
Exports 64.0 Mt
24
The future
• Most collieries optimising their coal production are now supplying coal to both inland and export markets.
• The Waterberg Coalfield with very large resources, cannot be fully exploited until the area’s infrastructure is suitable upgraded.
• More production is needed now to supply coal to RBCT’s present capacity of 91Mtpa and future expansion to 105Mtpa, to the inland market, Eskom Sasol and future independent power producers (IPPs).
• Although there are other sources of energy in the country, they can not compete with coal in price and reliability of supply.
THANK YOU!
Xavier Prevost Senior Coal Analyst +27 (0) 12 333 6305 +27 (0) 82 494 3968