Media releases

31 August 2006

Coal crucial to domestic and international economies

On the international front
“South African mines produced around 306, 3 million tons of coal last year. Of this figure, 187, 37 million tons were used locally, at a value of R13, 7 billion, with export sales totalling around 71 million tons, at a value of R21, 66 billion,” says Kuseni Dlamini, Executive Chairman of Richards Bay Coal Terminal (RBCT). “Thus, as the largest export coal terminal in both SA and the world, Richards Bay Coal Terminal (RBCT) is thus critical to SA in terms of earning foreign currency for the country.”

In line with the global demand for coal and the desire to increase SA's share of the global coal market (SA is currently one of the top five exporters of coal in the world), RBCT announced 2 weeks ago that they were expanding the coal terminal in Richards Bay from its current annual throughput capacity of 72 million tons to 91 million tons per annum.

Known as the Phase V Expansion Project, the expansion will bring R6bn of revenue to the SA economy. The estimated cost of the project is R1.2 billion, which will have offshoots for Richards Bay and surrounding communities, and the expansion is expected to be completed by the end of the first half of 2009.

“This project maintains RBCT’s position as the single largest export coal terminal in the world, an important consideration given that RBCT is the second largest foreign income generator for South Africa,” says Dlamini.

It is expected to create 3 500 jobs during the construction period with further sustainable job creation being realised through anticipated developments in the coal mining industry, as coal miners rise to the challenge of meeting the increased demand for exports. As part of the Phase V expansion project, special provision has been made to encourage a new generation of coal exporters by earmarking 4 million tons per annum for emerging BEE exporters. In a further effort to facilitate the transformation of the South African coal export industry, nine million tons per annum of the expansion capacity will be open for tender. RBCT has appointed Alexander Forbes as the independent adjudicator for the tender process which will commence in September.
Spoornet are putting R7bn into the expansion of the rail networks and infrastructure to accommodate the expansion which should create jobs on the Spoornet side too.

On the domestic front
On the domestic front, at least 90% of the electricity supplied by Eskom comes from coal, which then means that South Africa's coal industry plays a key role in ensuring the cheap supply of energy that underpins this country's good global competitive ratings in energy costs and reliability of supply. “It is crucial for SA to put the appropriate measures in place to have a very robust approach to handle energy security by being in the forefront of energy efficiency initiatives,” says Dlamini.

“Both the business community and the State recognise that improvements in energy efficiency are needed if the country is to remain globally competitive whilst dealing effectively with potential electricity capacity shortages, environmental concerns and the steadily rising prices of all energy sources. The approach, referred to as 'ecological modernisation' is key to ensuring a fine balance between industrialisation and environmental sustainability.”

According to Dlamini, often the missing link in effective ecological modernisation is the need for investments in the education of consumers, and distribution channels to make the behavioural changes widely available. However, because many communities are often under the radar screen of large firms, these opportunities do not attract the necessary technical or market development investments, despite them being key to mainstreaming the energy efficiency drive to ensure broad awareness and buy-in by all stakeholders.

“At RBCT, we have a project team dedicated to continuously improving our performance on energy savings by continuously measuring and monitoring our targets and integrating the energy saving imperative as part of the company's business objectives and culture. We are very pleased to be part of the Department of Minerals and Energy's voluntary energy efficiency accord as this would enable us benchmark our performance in this crucial area with our peers,” adds Dlamini. “Part of the challenge and opportunity for us is to constructively engage all our employees' hearts and minds in this process in ways that make it relevant to their day-to-day performance goals.”

Given visionary and responsible leadership from the public, private and civil society communities, Dlamini is in no doubt that the elimination of such threats posed by the lack of conserving energy which can cause and perpetuate poverty for future generations, is possible by 2015.

“South Africa can and should play a leading role in this campaign not only for the region but also for the world at large. Needless to say, the continent looks to us to implement these mission directed objectives. Working with the Department of Minerals and Energy in achieving these objectives is the cornerstone of a broader strategy to bring all our efforts under one roof.”

“The successful pursuit of energy conservation hinges largely on sustainable supplies of energy at cost-effective prices. The two are forever related and important for one another's survival,” he concludes.

FOR FURTHER INFORMATION PLEASE CONTACT:
Roz Thomas
Corporate Communications Consultants (Pty) Ltd
Tel:+27 (0) 11 783 8926
Fax: +27 (0) 11 783 7608
Email: rozt@corpcom.co.za