While SA grapples with domestic power and coal issues, the government would do well to keep one eye on the overseas markets for the nation’s coal exports.
Policymakers need to plan for this long-term decline. An unplanned, chaotic transition will have far more serious effects than one that has been prepared for. This is particularly meaningful for SA as it is so dependent on India as a coal export destination. In 2018, 48% of all SA exports out of Richards Bay Coal Terminal went to India, a nation with a clearly stated policy aim to reduce reliance on coal imports. In the first half of 2019 that rose to 60%.Other big thermal coal exporters depend less on one nation; in 2018, 31% of Indonesian exports went to China and 27% to India, while Australia’s biggest destination was Japan at 39%.
South Korea has a clearly stated intention to reduce reliance on coal, while Europe is further down that track than anyone. The Institute for Energy Economics and Financial Analysis expects government statements announcing a planned end to coal-fired power in some European countries will be joined by others globally in the near future.
SA’s main export terminal, RBCT, is already operating with 20% spare capacity as rail capacity hasn’t matched the terminal’s 91Mt a year export capacity.
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