Release date: 2010-09-02

Power Generation and Synthetic Fuels Boost the South African Coal Mining Industry Finds Frost & Sullivan

(PRZOOM - Press & Newswire) —  Cape Town, South Africa, 2010-09-02 - South Africa's coal production has been stagnant at approximately 240 million tonnes per annum for the greater part of the decade. This is due to depleted mines, declining coal recovery grades and rising operating costs


"Coal production is likely to increase marginally during 2010, as no major projects will be transitioning to full production during this period," says Frost & Sullivan metals & mining analyst Wonder Nyanjowa. "The electricity crisis in South Africa highlighted the need for not only expanding power generation capacity, but also ensuring adequate supplies of coal to power generating plants. Coal production must grow to cope with the anticipated increase in demand for coal from the power generation and synthetic fuels manufacturing industries."

New analysis from Frost & Sullivan (, Production and Investment Forecasts of the South African Coal Mining Industry, finds that South Africa's coal production is likely to increase to 300 million tonnes by 2015, as coal mining companies expand production to meet the anticipated increase in demand for coal from Eskom and Sasol.

If you are interested in more information on this study, please send an email to Patrick Cairns, Corporate Communications, at patrick.cairns[.], with your full name, company name, title, telephone number, company email address, company website, city, state and country.

"The construction of two new power stations by Eskom, the de-mothballing of three others, and the construction of an extra synthetic fuel manufacturing plant will result in the domestic demand for coal stepping-up by an additional 75 million tonnes in the next five to 10 years," notes Nyanjowa. "Fresh coal mines need to be developed and existing ones expanded to cope with the surge in demand for coal. All tier-one coal mining companies have announced expansion projects."

The Waterberg coal basin, which currently has one coal mine, is poised to become the mainstay of coal mining and power generation activities in the long term. Exxaro is expanding its Grootegeluk mine to cater to the demand for coal from Medupi power station, while Sasol has completed feasibility studies for its Mafutha project in the Waterberg coal basin.

However, infrastructure-related concerns, difficult geology, low-quality coal grades, housing and water shortages are likely to hamper the large-scale coal mining activities in the Waterberg coal basin.

"The existing Polokwane-Witbank railway line has the capacity to move approximately 5 million tonnes of coal per annum," explains Nyanjowa. "This is likely to impede the development of coal mines that produce coal specifically for export markets."

Development of new mines in the Waterberg coal basin to replace the depleted mines in the Witbank, Ermelo and Highveld coal fields is the sole sustainable method to successfully meet the rising demand for coal in the long term.

Production and Investment Forecasts of the South African Coal Mining Industry is part of the Industrial Automation & Process Control Growth Partnership Services programme, which also includes research in the following markets: South Africa's Gold Mining Industry, South Africa's Coal Mining Industry, South Africa's Platinum Group Metals Mining Industry, Diamond Mining Industry in Central and Southern Africa, Expenditure Analysis of the South African Gold Mining Industry, and Expenditure Analysis of the South African Platinum Mining Industry. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents.

Production and Investment Forecasts of the South African Coal Mining Industry / M53C


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