Challenges ahead for South Africa's coal industry
Global and domestic energy needs give South Africa’s coal sector a long future, but there are a number of challenges the sector must meet if it is to make best use of its valuable carbon-based fuel resources.
This emerged at a Coal Open Day hosted by global consulting engineers and scientists, SRK Consulting SA, at their Johannesburg offices in February, where various experts addressed media and clients on the prospects and challenges for coal.
The demand for coal globally remains strong, especially in the developing world, according to SRK principal engineer Andy McDonald, and particularly in countries like China and India.
In China alone, where 70 percent of electricity generation is coal-fired, plans are afoot to almost double energy output from current levels of about 1,145 gigawatts to 2,000 gigawatts by 2025. The country burns some 3,8 billion tonnes of coal each year.
Demand in Africa is also high; the continent needs another 7,000 MW more electricity each year to keep up with its growth rate, said McDonald, and South Africa has 20 percent of its households still needing to be electrified.
To serve this need, coal exploration in African countries has been ongoing, said SRK principal coal geologist Lesley Jeffrey.
She said: “The projects served by our Johannesburg office have been mainly in southern Africa, particularly in South Africa, Botswana, Zambia and Mozambique and the work has been varied – including geological reviews, resources and reserve reviews, exploration management, mining studies and competent persons’ reports.”
Turning SA’s coal to account, however, is become increasingly difficult. With much of the country’s easily accessible deposits now depleted – in the Witbank coalfields, for example – the resources now targeted are often more geological complex and expensive to mine, according to SRK chairman Roger Dixon.
As a founder member of the South African Mineral Resource Committee (SAMREC) and currently the SA representative on the global Committee for Mineral Reserves International Reporting Standards (CRIRSCO), Dixon highlighted the ‘modifying factors’ that underlie a realistic assessment of economic value in a coal deposit.
“The geological complexity of a deposit, for instance, features strongly among the modifying factors to be applied when converting a coal resource to the status of reserve,” he said.
“The coal geology of the Waterberg is challenging, and this requires investors to be especially vigilant about how exploration results are gathered and interpreted.”
Emphasising water management issues facing coal mining was SRK partner and principal hydrologist Peter Shepherd, who warned that SA’s water resources were under strain and that new mines could only be brought on stream if they found innovative ways to meet their water needs.
Shepherd was encouraged by the steps taken by mines to conserve water, but said the price of water could double in the next five years as a reflection of its real cost to society.
On the broader sustainability theme, SRK partner and principal sustainability consultant Donald Gibson, welcomed the gradual acceptance of ‘shared value’ as a principle to underpin a more developmental role for mining; the challenge, he said, was for better implementation of sustainability strategies in day-to-day operations. He also said that the carbon tax to be introduced in 2016 will affect the coal sector along with many others.
“SA is starting to accept that carbon emissions must be priced,” said Gibson. “The fact that organisations can pollute the atmosphere and not pay for the negative impacts of that pollution is one of the most obvious market failures – hence the carbon tax.
“It remains to be seen whether South Africa will structure the tax appropriately to avoid affecting competitiveness. South Africa’s carbon intensity is a key factor that needs to be considered in decision making at both government and mining company level.”
Senior mining engineer Xolani Gumede shared insights on blast design and blast optimisation, to reduce carbon emissions and mining costs.
He stressed the value of blasting advisory services that are not directly linked to a service contract – to avoid possible conflicts of interest in the advice given.
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.