Zwane misses chance to allay coal fears

05/02/2015 Minister of Minerals and Resources Musebenzi Zwane arrives Vantage Goldfields Limited's Lily Mine near Barberton in Mpumalanga where about 112 minerworkers were rescued after a collapse occured in one of the shafts. Picture: Phill Magakoe

05/02/2015 Minister of Minerals and Resources Musebenzi Zwane arrives Vantage Goldfields Limited's Lily Mine near Barberton in Mpumalanga where about 112 minerworkers were rescued after a collapse occured in one of the shafts. Picture: Phill Magakoe

Published Feb 8, 2016

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Johannesburg - Mineral Resources Minister Mosebenzi Zwane missed an opportunity to allay the fears of the coal industry after snubbing the annual two-day coal exports conference held in Cape Town last week.

Mosa Mabuza, the deputy director-general for mineral policy and promotion, read a speech on his behalf.

Zwane, who was appointed in October, was unable to attend the event due to a cabinet Lekgotla, his spokesman Martin Madlala said.

He is expected to attend the Mining Indaba, which starts in Cape Town today. His predecessors, Ngoako Ramatlhodi and Susan Shabangu, had previously attended the event.

“It would have been nice if he was here, especially when there are so many questions about where the coal industry is going,” Greg Dwane, a director at Matswani Capital, said.

The government planned to declare coal a strategic mineral and a task team had been appointed to look at the matter.

Low key

Event organisers said it was low key, owing to the turmoil around commodity prices and the slowdown in the global economy.

“Global traders are not travelling at the moment,” Andrew Wells, the managing director of IHS Energy Coal Exports Conference, said.

“We have previously attracted 300 delegates from across the world, there were only 120 delegates this year, mainly comprising local coal players and academics,” he said.

South Africa exported roughly 78.8 million tons of coal last year. The bulk was exported from the Richards Bay coal terminal. Last month the terminal announced it had reached a record 75.4 million tons, an increase of 4 million tons above 2014 levels.

Xavier Prevost, a coal analyst at XMP Consulting, said the focus should be on the domestic, instead of the export market, because prices were unlikely to turn in the short to medium term.

The coal price had declined 60 percent since 2012 to trade at $48 a ton. Prevost said there had been no growth in coal production from South Africa as only 255.2 million tons of coal were produced. He said 78.8 million tons of coal were exported, with revenue of R48 billion, compared with exports of 177.2 million tons, and R54bn in revenue last year.

“We expect prices to go down even more. Our future is in the local rather than the export market. We need to cut down on exports”, Prevost said.

The coal industry is the biggest contributor to South Africa’s mining revenue and employs 70 000 people.

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