South Africa’s national utility Eskom – struggling with a serious liquidity crunch, frequent strikes, a credit downgrading to junk status as well as top-management changes – has implemented frequent blackouts this year as it cannot produce enough electricity to meet demand.

The blackouts threaten mining and coal loading activity at South Africa’s massive Richards Bay export terminal…..http://reut.rs/1Q4i1o8

BMI Research has maintained a positive outlook for Botswana’s mining sector to 2018 with diamonds remaining the country’s main product but coal production accelerating in the years ahead.

“Over the next few years we highlighted particularly strong potential for growth in coal production,” BMR Research said in it’s a recent report. “Fast growth from a low base will be driven by companies including Anglo American, Exxaro, African Energy and CIC Energy.”

The country came top of BMI Research’s regional risk/reward ranking with the market research firm saying it saw “little pospect of the country being usurped in the near future.”

“Botswana’s impressive country risk scores are due to a strong legal framework and investor-friendly environment,” the report said. “The country has some of the lewest tax rates in the region and there is little government interference in the mining sector. Additionally, Botswana has some of the lowest rates of corruption in Africa.”

[source:  http://www.worldcoal.com/]

South Africa has granted mining rights for 36 new projects over the past year, with a potential to create about 6 000 jobs. Is the mining industry still a good way out of unemployment? http://bit.ly/1cUqVYE

Prices in the worldwide thermal coal market appear to be stabilizing. Leading to the question: is there any hope of a recovery in sight soon?

To find out, it’s critical to keep an eye on the supply dynamics unfolding globally. And one particular event may signal a big change coming, according to news emerging this week.

That comes from important global coal producer South Africa. Where Platts reports that local producers may be getting a financial incentive to halt exports.

That’s because state-owned South African electricity generator Eskom is looking for coal feed to its power plants. And may be willing to pay a premium in order to get it.

The test case here is the Optimum coal mine, in South Africa’s eastern Mpumalanga basin. A facility owned by Glencore — which was placed on care and maintenance in January due to currently-low export prices for thermal coal.

Eskom however, badly needs coal supply from mines like Optimum. Power shortages have been rife throughout South Africa of late, and electricity prices have been steadily pushing upward.

Given such, Eskom has pitched Glencore a deal: restart the Optimum mine and sell the output domestically.  In return for the supply, Glencore would reportedly be able to save on transport costs for its coal. With Eskom instead picking up the charges for shipping coal by rail out of Optimum.

According to local experts quoted by Platts, the result would be a cost savings of about $27 per ton for Glencore. Bringing the effective price received by the company for domestic sales to as much as $36 per ton.

This is significantly higher than the approximately $16 per ton that Eskom usually pays for domestic coal. Giving a producer like Glencore a significant advantage in selling locally.

If this deal becomes more-widely offered to South Africa’s coal producers, it could have a notable effect on export supply. More miners could choose to sell their product locally — meaning less coal sailing out of the country to buyers in big markets like India and eastern Asia.

Given that South Africa is one of the few swing suppliers for these markets, that would be a significant shift. Watch for export figures over the coming months from South Africa’s key Richards Bay terminal.

[source:  http://oilprice.com/Finance/investing-and-trading-reports/]