Seriti Resources Holdings Ltd., poised to become Africa’s second biggest coal producer, is betting that South Africa will rely on coal for decades even as Africa’s biggest emitter of greenhouse gases implements carbon taxes and is under pressure to improve air quality.
The most-industrialized economy on the continent will soon release an energy blueprint to outline the sources it will get its power from in the future. The carbon tax, designed to incentivize a move away from the coal that accounts for almost all power generation, could eventually cost state-owned power utility Eskom Holdings SOC Ltd. about 11.5 billion rand ($751 million) a year.
“When you operate in the coal-mining space the impression created is like you’re an environmental denialist. We are not,” Mike Teke, Seriti’s chief executive officer, said in an interview at the company’s headquarters in Johannesburg on Monday. “We operate in a developing economy” where alternatives will need to be phased in gradually, he said.
Some government forecasts are in line with Teke’s view. While coal-fueled plants will decline to less than half of the country’s total installed power generation capacity by 2030, it will still contribute more than 65% of energy production as the plants run around the clock while renewables depend on sun and wind availability, according to last year’s draft of the Integrated Resource Plan. A final version is expected within weeks.
Eskom’s appetite for the fuel hasn’t fluctuated much over the last decade, with the utility burning 116 million metric tons in 2018. The state company is facing growing competition from privately owned renewable power generation.
For the rest of this article: https://www.bloomberg.com/news/articles/2019-08-28/south-africa-will-rely-on-coal-for-decades-key-miner-says