Cape Town - South Africa lost out on R23 billion ($2 billion) in coal export revenues last year due to a drop in prices for the commodity, the mines minister said on Wednesday.
South Africa needs investment of R100 billion to develop its coal resources in the “short-to-medium” term to expand production and improve infrastructure, Ngoako Ramatlhodi said at the IHS coal conference in Cape Town.
“We are concerned about the extreme volatility in the coal price, which has a direct effect on the profitability of companies, contribution to the fiscus, as well as implications for employment,” he said.
Last month, Glencore's South African coal unit, Optimum Coal Mines, warned it may close some of its mines and reduce annual production by at least 5 million tons and leading to job losses.
Coal is South Africa's chief source of energy, accounting for 95 percent of electricity generation, 70 percent of primary energy and 30 percent of petroleum liquid fuels.
State power utility Eskom, the main buyer of domestic coal, has been implementing rolling blackouts this year as it struggles to meet electricity demand after decades of underinvestment in new generating capacity.
Reuters