South Africa is the largest coal producer in Africa, holding 95% of Africa’s total coal reserves, while on a worldwide scale it has the ninth-largest amount of recoverable coal reserves.
The South African economy is heavily reliant on coal as a source of energy with more than 70% of the country’s total primary energy consumption.
Total Energy Consumption South Africa 2012
Source BP Statistical review of world energy 2013
Coal consumption is expected to continue to increase as new coal-fired power stations are scheduled to commence production in the coming years to meet rising electricity demands.
A large portion (approximately 25%) of the coal produced in South Africa is exported. The country’s largest coal export terminal is the Richards Bay Coal Terminal. In 2013, the terminal received and exported more than 70 million tons of coal predominately to India and China, making it one of the largest coal exporting terminals in the world. South Africa is strategically located to distribute export grade coal to key markets in Europe and the Middle East.
By international standards, South Africa’s coal deposits are relatively shallow with thick seams, which make them easier and usually cheaper to mine. In addition, there has been a decline in high-quality reserves in recent years resulting in an increased political and industrial push for the application of technical advances to extend the life of major coal deposits.
Coal Fines Opportunity
White Energy has identified a unique opportunity in South Africa to utilise the binderless coal briquetting technology to upgrade discarded thermal coal fines into compacted, transportable and useable briquettes of significantly higher value. In the context of the South African coal industry this represents a significant economic opportunity. It is estimated that approximately 60 million tonnes of discard coal fines are generated each year from mining operations in South Africa, as well historical discarded coal fine deposits of approximately 2 billon tonnes. New arising coal fines will continue to be generated at coal mines not only in South Africa but across the other coal producing regions of the world, due to inefficiencies in coal processing methods.
Coal fines are small coal particles (<500 micron) that are separated from coal during the coal beneficiation process. Coal fines, together with water, form part of the waste stream and are typically deposited in slurry ponds and regarded as an environmental cost.
There is a significant ongoing cost for coal producers associated with the management of coal fines. White Energy, through its majority owned subsidiary (“RESA”), identified the value proposition of transforming a potential environmental liability for the coal producer into a useable briquette which can be sold for a profit.