Page 5 - AfrElec Week 22 2021

AfrElec COMMENTARY AfrElec

China has 452mn tpy of coal mine capacity coal plants has been in decline since 2019, ther-
under construction and another 157mn tpy in mal coal operations still dominate, making up
planning; Australia has 31mn tpy under con- 71% of proposed mine capacity. However, in
struction and 435mn tpy in planning; India has North America the numbers are reversed, with
13mn tpy under construction and 363mn tpy in metallurgical coal for steel-making accounting
planning; and Russia has 59mn tpy under con- for 70% of proposed capacity.
struction and 240mn tpy in planning. The emissions from coal mine projects now
About 24% (544mn tpy) of the world’s pro- on the drawing board would total between
posed mine capacity is located in four Chinese 5,000 and 5,800mn tonnes of CO2 equivalent
provinces and regions: Inner Mongolia (234mn (CO2e) each year from combustion and meth-
tpy), Xinjiang (123mn tpy), Shaanxi (95mn tpy) ane leakage.
and Shanxi (92mn tpy). Coal mines and related infrastructure such
The majority of proposed coal mines in as ports and railways are capital-intensive pro-
China and India are sponsored by state-owned jects that cost tens of millions of dollars per mil-
enterprises (SOEs) wholly or partially owned by lion tpy mined to open. Yet the prospects of a
the government, meaning taxpayer money con- low-carbon transition and tighter emission pol-
tinues to subsidise mine projects to fuel province icies put these projects at risk of shutting down
and state economies. early, representing up to $91bn in stranded assets
The report said majors such as Glencore, from coal mines alone.
Mechel and BHP still remained invested in new
mines and mine expansions, though small and Focus on South Africa
independent firms have shown the greatest The report said that South Africa’s coal produc-
appetite for new projects, especially in Australia tion and consumption was ranked seventh in the
and Russia. world, with reported production at 258mn tpy
Nearly two-thirds of mine proposals are in 2019.
“greenfield” developments, signalling the indus- While the market has been historically
try’s willingness to break ground on new mines dominated by Anglo American, Sasol Mining,
that tend to lock in more long-term production BHP Billiton Energy Coal South Africa (Becsa)
and more future emissions than existing mines. and Xstrata (Glencore), a number of compa-
The remainder are “brownfield” developments nies, including Anglo American, Glencore and
that expand the capacity of existing operations South32, which spun out of BHP Billiton in
or recommission idle mines. 2015, have exited in recent years or are in the
While mega coal mine projects often attract process of exiting in the near future.
intense global opposition from climate activists Smaller, often black-owned companies such
and pose a financial risk for investors, the indus- as Seriti Resources and Exxaro, have been taking
try is primarily reliant on mid-size operations their place.
with lower public profiles to boost supply. The The country’s coal reserves are projected to
median size for a new coal proposal is 3.5mn tpy. last for the next 50 years. South Africa has 30
Although power generation from the world’s proposed coal mines with a projected output of

Week 22 03•June•2021 www. NEWSBASE .com P5