Production and Investment Forecast in Southern Africa's Coal Mining Industry

  • Publication Date:September 2013
  • Publisher:Frost & Sullivan
  • Product Type: Report
  • Pages:103
  • ISBN:1628603

Production and Investment Forecast in Southern Africa's Coal Mining Industry

Increasing Regional and Global Demand for Energy will Stimulate Coal Production in Southern Africa

This research service provides detailed and up-to-date market intelligence on the production and investment trends in the coal mining industry in Southern Africa. The Southern African region is the largest coal producing region in Sub-Saharan Africa. South Africa, Zimbabwe, Botswana, and Mozambique produce thermal and metallurgical coal for electricity generation and for steel and brick manufacturing in domestic economies as well as export markets. Large-scale coal development projects will consolidate Southern Africa's leadership position as a key coal producing region in Sub-Saharan Africa.

Executive Summary

• This research service provides an up-to-date analysis of the production and investment trends in Southern Africa's coal mining industry between 2006 and 2018.
• The Southern African region is the largest coal producing region in Sub-Saharan Africa which had an attributable coal production ofX million tonnes of coal in 2012.
• South Africa, Zimbabwe, Botswana, and Mozambique are key producers of coal in the Southern African region which use coal to generate electricity and to provide heat in general engineering, cement, and steel manufacturing industries.
• A significant portion of Southern Africa's coal production is sold to international coal markets in Europe, India, and China.
• Within Southern Africa, South Africa is the largest coal producer, producing Xmillion tonnes of coal and accounting for % of the region's total coal production in 2012.
• Zimbabwe and Mozambique are the second and third largest coal producers which produced Xmillion tonnes and X million tonnes of coal, respectively, in 2012.
• Coal production from the Southern African region increased from X million tonnes in 2006 to X million tonnes in 2012.
• Southern Africa's coal production is expected to continue growing between 2013 and 2018 in response to the increasing domestic and international demand for coal, rising coal prices, and large-scale coal expansion projects—such as Project Mafutha and Grootegeluk Phase 4—that are being developed in the Southern African region.
• Environmental concerns, railway capacity constraints, inadequate port facilities, high operating costs, declining coal reserves, and long-term supply contracts are some of the challenges that the Southern African coal mining industry is experiencing.
• Coal mining, transportation, and consumption pose a number of environmental challenges such as noise, dust, air, and water pollution.
• Tightening environmental legislation, particularly in the European Union (EU), resulted in South Africa's coal exports to the EU declining from X?% in 2006 to X% of the country's total exports in 2012.
• In addition, Southern Africa does not have enough railway capacity and port facilities for the transportation of coal from producing regions to domestic and export markets.
• However, there are coal expansion projects in Southern Africa's coal mining industry that were collectively worth $X billion in 2012.
• There were X prefeasibility stage projects in Southern Africa's coal mining industry that were collectively valued at $X billion in 2012.
• Furthermore, there were construction stage projects in Southern Africa's coal mining industry that were collectively worth $Xbillion in 2012.

CEO's Perspective

1. Southern African coal production is forecasted to grow at a CAGR of X% between 2012 and 2018.
2. Rising global demand for energy, increasing regional demand for energy, rising coal prices, and abundant coal reserves will drive continued growth of Southern Africa's coal industry.
3. Ports and railway capacity constraints, environmental concerns, and safety concerns are likely to inhibit the continued growth of Southern Africa's coal industry.
4. Large-scale coal development projects in South Africa will consolidate the country's lead as largest coal producer in Southern Africa.
5. Mozambique is poised to become Southern Africa's second largest coal producer following Vale and Rio Tinto's entry into the country's coal sector.

Aims and Objectives

Research Aim
The aim of this research service is to provide a comprehensive and up-to-date analysis of the production and investment trends in the coal mining industry in Southern Africa.

Research Objectives
Understand the production trends in the coal mining industry in Southern Africa between 2006 and 2018.
Provide company- and country-level production forecasts for the coal mining industry in Southern Africa between 2006 and 2018.
Understand Southern Africa's coal mining industry's capital expenditure trends and discuss the expansion projects between 2012 and 2018.
Provide insight into the factors that drive and restrain the growth of the coal mining industry in Southern Africa.

Scope of the Study

Geographic Scope
The project will focus on the production, investment, and capital expenditure trends in Southern Africa's coal mining industry. The country scope includes: Zimbabwe, Botswana, South Africa, and Mozambique.

Production Scope
This research service will focus on coal production at the country- and company-level in Southern Africa's coal mining industry.

Expenditure Scope
This research service will focus on capital expenditure trends and expansion projects in Southern Africa's coal mining industry.

Introduction to the Global Coal Mining Industry

• Coal is arguably the most important primary source of energy in the global energy mix. Coal reserves are geographically dispersed across a number of continents and coal production is not subject to geopolitical tension as is the case with oil and natural gas.
• In 2012, global economically recoverable coal reserves were estimated to be approximately one trillion tonnes and these reserves are estimated to last approximately X years at current production rates.
• According to the United States' Energy Information Administration (EIA), the global economy is estimated to have consumed Xmillion tonnes of oil equivalent, with coal accounting for approximately X% of total energy consumption in 2012.
• China and India have emerged as the most significant consumers of coal in the global economy with fossil fuel accounting for approximately X% and X%, respectively, of the two countries' primary energy needs.
• The share of coal is projected to continue increasing in response to the gradual depletion of oil reserves and increasing industrialisation and urbanisation in China and India.
• The relatively lower coal prices compared to oil and gas prices will also lead to increased consumption of coal for the foreseeable future.
• The EIA maintains that the global coal mining industry producedX billion tonnes of coal in 2012, reflecting a significant increase from the X billion tonnes produced in 2011.
• China is the world's largest coal producer which produced X billion tonnes of coal in 2012, although its coal reserves are significantly lower than those of the United States.
• The United States is the world's second-largest coal producer that produced X billion tonnes of coal in 2012.
• India and Australia are the third- and fourth-largest coal producers which had an attributable coal production of 585 million tonnes and X million tonnes of coal, respectively, in 2012.
• South Africa is the world's seventh-largest coal producer that had a production total of X million tonnes of coal in 2012.
• The EIA maintains that coal production will continue growing as a result of growing global demand for energy, the increasing reliance on coal in many countries' energy mix, and the deregulation of the electricity market in developed economies.
Table of Contents

1. Executive Summary
2. Research Aims, Objectives and Scope
3. Overview of the Global Coal Mining Industry
4. Southern Africa's Coal Mining Industry
5. South Africa's Coal Mining Industry
6. Zimbabwe's Coal Mining Industry
7. Botswana's Coal Mining Industry
8. Mozambique's Coal Mining Industry
9. Industry Challenges
10. Market Drivers and Restraints
11. Capital Expenditure Trends in Southern Africa's Coal Mining Industry
12. Southern Africa's Coal Production Forecast
13. The Frost & Sullivan Story

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