'We must embrace new mining charter'

(iStock)
(iStock)

Large mining companies should embrace the new Mining Charter, which was released in June, instead of resisting it, believes a junior coal mining company with operations and projects in Mpumalanga and Gauteng.

“Had I been a big player, I would have stood up and supported the new Mining Charter fully,” said Vuslat Bayoglu, executive chair of junior mining company Canyon Coal, during the Coaltrans Conference in Cape Town this week.

According to Bayoglu, making workers and the community part of the operations solves much of the unrest mining companies face.

“In Delmas, people are burning tyres and trucks, and in Springs, Bronkhorstspruit and Ulundi, they are doing the same,” Bayoglu said.

“You can solve this problem by making workers and the community really part of your new projects, not just as employees. Give a stake to your workers and a stake to the community.”

This is what Canyon Coal has done for one of its new collier projects in Gauteng – it has established a 26% consortium that is owned by workers and the community on a 50-50 basis.

'Fighting transformation'

“It works well. Why can’t we do the same thing in all new operations in South Africa?” Bayoglu asked.

He warned that mining companies that were fighting transformation were feeding the nationalisation debate.

“If you don’t accept it [the new Mining Charter], you allow populist politicians to say the mines need to be nationalised. South Africa will not become the next Zimbabwe. You are stubborn and must change your mind-set.”

When asked about his outlook for domestic coal, Bayoglu said he was confident, despite the findings of a recent study by the University of Cape Town that suggested that South Africa’s coal mining and coal-fired electricity sectors are in a state of crisis.

According to the data, Eskom’s coal costs have increased by 300% in real terms over the past 20 years, making the resource increasingly less competitive.

However, Bayoglu isn’t worried.

“We see no change in the domestic production outlook in the 2018/19 financial year. According to the draft integrated resource plan, South Africa will burn coal for 70% of its power production until 2030. This is a big opportunity to expand.”

Johann Bester, project manager at Thebe Investment Corporation, agreed: “People talk about the proportion of coal diminishing versus renewables. We, however, see a lot of stability in the overall volume of coal consumed globally and in South Africa.

“Statistics show the overall demand for coal will increase until 2030, after which we foresee stability until 2040/50.”

Demand for coal domestically and in India would continue to drive the appetite for South African coal, said Henk Langenhoven, chief economist at the Chamber of Mines.

“India is growing out of its boots and has a demand problem. Its economy will keep on growing and it’ll need power,” he said.

Bester agreed: “Last year, 45% to 46% of our coal exports went to India. It uses very similar coal to us.”

He acknowledged India’s plans to move towards higher energy and cleaner coal, but intentions didn’t have to mean bad news for South African coal miners.

“This will likely lead to more local beneficiation of our coal,” he said.

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