Coal markets came under immense pressure in 2020, largely owing to local and international lockdowns as result of COVID-19. Since the easing of lockdowns and the resumption of industrial business activities, along with good news on the development and roll out of vaccines, commodity markets are stabilising. We are very optimistic about the future of our business, as we continue being a low-cost operator, while taking care of our colleagues’ health and safety – which is our paramount priority.

In 2021, we aim to begin development of two mines De Wittekrans and Bekezela Colliery.  De Wittekrans will see us invest about R600 million in Phase 1 development and create 430 jobs, while Bekezela Colliery will cost around R1.5 billion to develop and create 800 jobs. In addition to this we have a pipeline of projects that we intend to develop in 2022 and 2023.

These mines are being developed with the intent, in part, to provide Eskom with options to procure the right quality coal at a lower price. A major element of supporting Eskom’s turnaround is to reduce costs. Coal suppliers should therefore make sure Eskom has reasonable options to purchase coal at the right price to support economic growth in South Africa and empower the majority of South Africans. Without cheap electricity, economic recovery – and by extension job creation – will be impossible. 

Many of the larger mining houses are finding challenges in securing financing from traditional finance institutions for new coal projects and are, therefore, unbundling their coal assets. We are in the fortunate position that we do not seek out external funding for our projects and can therefore continue to evaluate opportunities that may arise from such asset disposals.  This means we can develop projects at competitive costs to the benefit of downstream industries where our products are consumed as an input in manufacturing – an often-overlooked critical role of coal – and for power generation.

South Africa has world class rail infrastructure that is well integrated with a stellar port network. However, for South Africa to benefit maximally from this infrastructure, logistical bottlenecking challenges that cause train scheduling disruptions need to be overcome, to ensure we can export product efficiently and rapidly to generate critical export revenue.

In line with our Mining Industry 4.0 strategy, we have established a department dedicated to technological innovation that is currently implementing and integrating leading-edge technological solutions.

In this edition, you will read how Canyon Coal continues to support job creation, create procurement opportunities for local communities, implement community development projects and business development initiatives, which form part of our social and labour plan (SLP) and local economic development (LED) requirements.