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South African Coal Sector Report Directorate: Energy Data Collection

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South African Coal Sector Report Directorate: Energy Data Collection SOUTH AFRICAN COAL SECTOR REPORT DIRECTORATE: ENERGY DATA COLLECTION, MANAGEMENT AND ANALYSIS SOUTH AFRICAN COAL SECTOR REPORT DIRECTORATE: ENERGY DATA COLLECTION, MANAGEMENT AND ANALYSIS Compiled by: Ms Keneilwe Ratshomo Email: [email protected] And Mr Ramaano Nembahe Email: [email protected] Published by: Department of Energy Private Bag X96 Pretoria 0001 Tel: (012) 406-7819/012 406 7540 192 Visagie Street, C/o Paul Kruger & Visagie Street, Pretoria, 0001 Website: http://www.energy.gov.za DEPARTMENT OF ENERGY Director-General: Mr T. Zulu ENERGY POLICY AND PLANNING BRANCH Acting Deputy Director-General: Mr. T. Audat ENERGY PLANNING CHIEF DIRECTORATE Acting Chief Director: Ms. Z. Harber ENERGY DATA COLLECTION, MANAGEMENT AND ANALYSIS DIRECTORATE Director: Ms. V. Olifant ISBN: COPYRIGHT RESERVED DISCLAIMER WHEREAS THE GREATEST CARE HAS BEEN TAKEN IN THE COMPILATION OF THIS PUBLICATION, THE DEPARTMENT OF ENERGY RELIES ON DATA PROVIDED BY VARIOUS SOURCES AND DOES NOT HOLD ITSELF RESPONSIBLE FOR ANY ERRORS OR OMISSIONS EMANATING AS A CONSEQUENCE OF PROVISION OF INACCURATE, INCORRECT OR INCOMPLETE DATA FROM SUCH SOURCES. FOREWORD It gives me great pleasure to introduce the report: South African Coal Sector. This report is based on information collated from government departments, coal industry and research papers. This publication covers a broad overview and analysis of the South African coal industry and aims to keep stakeholders informed about developments as well as key issues affecting the industry. This publication presents the industry in a format which provides an overview of South Africa’s coal market, the value chain and the different uses of coal. It also presents and analyses the supply and consumption trends, which are further categorized into market sectors. The Department of Energy is working hard to ensure accurate, timely and reliable provision of data in its publications and hopes that this report will become a source of reference among energy analysts in South Africa and abroad. I extend my most sincere thanks and appreciation to the Energy Data Collection, Management and Analysis Directorate for the hard work that went into the compilation of this publication. I would also like to record my appreciation to all the energy data providers who have helped us to accomplish the compilation of this report. Comments and inputs are welcome and could be addressed to [email protected]. Mr Thabane Zulu Director General Department of Energy i TABLE OF CONTENTS Contents Page FOREWORD ................................................................................................................... i TABLE OF CONTENTS ................................................................................................. ii LIST OF FIGURES ........................................................................................................ iv NOMENCLATURE .......................................................................................................... v 1. INTRODUCTION ............................................................................................................1 2. OVERVIEW OF THE COAL INDUSTRY .........................................................................2 2.1 Occurrence ..............................................................................................................2 2.2 Exploration ...............................................................................................................4 2.3 Mining methods .......................................................................................................4 2.4 Coal preparation ......................................................................................................6 2.5 Coal transportation...................................................................................................6 2.5.1 Conveyor belts ..................................................................................................6 2.5.2 Road transport ..................................................................................................7 2.5.3 Rail Transport (Transnet/TFR) ..........................................................................7 2.6 Coal export ..............................................................................................................8 2.7 Coal uses .................................................................................................................9 2.7.1 Electricity Generation ........................................................................................9 2.7.2 Liquid fuel and chemicals production .............................................................. 10 2.7.3 Metallurgical coal ............................................................................................ 11 2.7.4 Other uses ...................................................................................................... 12 3. COAL SUPPLY IN SOUTH AFRICA ............................................................................. 12 3.1 Coal production ...................................................................................................... 12 3.2 Coal exports........................................................................................................... 13 3.3 Coal imports........................................................................................................... 13 4. COAL DEMAND IN SOUTH AFRICA ............................................................................ 14 ii 4.1 Transformation sector ............................................................................................ 15 4.2 Final consumption .................................................................................................. 15 4.2.1 Coal consumption in the industrial sector ........................................................ 16 4.2.2 Coal consumption in other sectors .................................................................. 17 5. COAL PRICING IN SOUTH AFRICA ............................................................................ 18 6. THE IMPACT OF COAL ON THE ENVIRONMENT ...................................................... 18 6.1 Mining .................................................................................................................... 18 6.2 Beneficiation .......................................................................................................... 19 6.3 Utilisation ............................................................................................................... 19 6.4 Mitigations ............................................................................................................. 20 7. SOUTH AFRICA POSITION IN THE INTERNATIONAL COMMUNITY REGARDING THE USE OF COAL AS A TRANSITION TO LOW CARBON ECONOMY ........................... 21 8. POLICY AND REGULATORY FRAMEWORK .............................................................. 22 9. OUTLOOK .................................................................................................................... 23 10. CONCLUSION .......................................................................................................... 24 11. REFERENCES .......................................................................................................... 25 iii LIST OF FIGURES Figure 1: South Africa’s coal fields .........................................................................................3 Figure 2: Production of coal, 2006-2015 .............................................................................. 12 Figure 3: Coal exports, 2006-2015 ....................................................................................... 13 Figure 4: Coal imports, 2006 - 2015 ..................................................................................... 14 Figure 5: Coal consumption, 2006 - 2015 ............................................................................. 14 Figure 6: Coal consumption in the transformation sector, 2006 - 2015 ................................. 15 Figure 7: Final consumption in various sectors, 2006 - 2015 ................................................ 16 Figure 8: Coal consumption in the industrial sector .............................................................. 17 Figure 9: Coal consumption in other sectors ........................................................................ 17 Figure 10: Coal export price in South Africa: 2006 - 2015 .................................................... 18 iv NOMENCLATURE CCS Carbon Capture and Storage CTL Coal-to-Liquids CV Calorific Value DMR Department of Mineral Resources DoE Department of Energy GHG Greenhouse gas GTL Gas-to-Liquids IPPs Independent Power Producers IRP Integrated Resource Plan MPRDA Mineral and Petroleum Resources Development Act NEMA National Environmental Management Act NWA National Water Act RBCT Richards Bay Coal Terminal ROM Run-of-Mine SACCCS South African Centre for Carbon Capture and Storage US$/tonne US dollar per tonne kt kilo ton MJ/kg Megajoule per kilogram MJ/MWh Megajoule per Megawatt hour v 1. INTRODUCTION Coal is a combustible sedimentary rock formed from vegetation that has been consolidated between other rock strata and altered by the combined effects of pressure and heat over millions of years. Coal is composed primarily of carbon, and also contains varying amounts of other components, like hydrogen, oxygen, sulphur and other impurities. Main parameters used to
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