Role of Coal

COAL IS AND WILL REMAIN AN ESSENTIAL AND CRITICAL COMPONENT TO ECONOMIC DEVELOPMENT.

“The world still needs coal – not only is coal the affordable choice for energy in many markets, but it remains the only viable choice for critical industries. Coal is critical to our world, through its use in providing much-needed affordable electricity and also in building our societies through its use in steel and cement. 37% of the world’s electricity and over 70% of the world’s steel is produced using coal.” – World Coal Association (“WCA”)

Coals remains the world’s largest single source of electricity, with the WCA estimating that by 2040 coal will still account for 22% of the world’s electricity generation.

In the developing world, which Africa is a part of, coal remains the principal input for affordable electricity generation. Yet, as reported by Engineering News in an article published on 27 July 2021, “24 of Africa’s 54 countries have electricity access rates of below 50%” meaning that 600 million of Africa’s people lack access to electricity”. Countless studies prove that access to affordable electricity directly supports a better quality of life and promotes economic development and prosperity, because education, health and productivity are improved.

In 2010, the World Economic Forum defined energy poverty as “the lack of access to sustainable modern energy services and products.” According to Rose M. Mutiso, Research Director at the Energy for Growth Hub, “Energy poverty, or the lack of access to electricity and other basic energy services, affects nearly two-thirds of Sub-Saharan Africa. As the region’s population continues to increase, so will the need to build a new energy system to grow with it.”

In Minergy’s opinion, coal will remain an essential component for years to come, not only for base load electricity generation, but more importantly, for the prosperity that this base load power creates. In developing nations, notwithstanding the desire to switch to greener options, it is in no way affordable. We believe that the solution lies in a responsible and just energy transition that takes technology into account and which supports clean coal and a structured move towards a balance between renewable energy and the cheaper coal alternatives.

Coal and renewables are not enemies Coal has and will provide the affordable baseload which enables renewables. Any unjust transition has significant economic implications especially in developing continents such as Asia and Africa.

It has recently emerged that Botswana is planning to develop six new coal mines, importantly with rail links to support the export of coal through South Africa via the Richard’s Bay Coal Terminal. The Botswana government is prepared to investment money into these projects alongside investors from China, to provide the impetus the sector needs.

“Make no mistake, we all subscribe to a cleaner world,” Lefoko Moagi, Botswana’s minerals minister, told a local newspaper last year. “But we believe that we just can’t leave an abundance of a God-given resource like that.” –
Extract from Moneyweb article published on 12 July 2021

“If this energy transition is to take place, especially in southern Africa and everyone gets together, with the right intentions, partnerships can be formed and great things achieved.”– Morné du Plessis, Minergy CEO

Minergy is supportive of a just energy transition, but for reasons mentioned earlier in this section, it believes that for the developing southern African region, this is going to take a long time. Furthermore, this transition cannot take place to the detriment of economic development, especially for those who live in energy poverty, because to stimulate economic growth and human prosperity, access to affordable energy is vital.

A just energy transition impacts not just the mining and power generation industry. Peripheral industries such as cement, boiler operations amongst others are also impacted and not considered.

Minergy is committed to adopting the necessary technology and evaluating greening options and supports the deployment of cleaner coal technologies.

We believe that technology is key to cleaner coal to support and meet environmental goals, but that coal will continue to be a critical component to economic development for the foreseeable future, particularly in Africa.

WHY BOTSWANA CAN PARTICIPATE IN THE REGIONAL SUPPLY OF COAL