Markets

With low production costs, transport arrangements in place and the initial years’ production already underwritten by sales contracts, Boikarabelo is positioned to benefit from growth in demand while contributing to South Africa’s economy through exports.

Recent projections by the US Energy Information Administration (EIA) indicate that, by the year 2040, global energy consumption will be 48% greater than it was in 2012, and that fossil fuels – oil, gas and coal – will be providing three quarters of the world’s needs by 2040. Although fossil fuels will deliver a slightly lower proportion of the energy mix than at present, projections indicate that the world will continue to rely predominantly on fossil sources for energy. The EIA’s analysis projects thermal coal growth will rise by an annual 0.6% over the period – slightly lower than the growth rates for gas and oil – supported by the size of the existing fleet of coal-fired power stations and additions to this well-proven technology.

The International Energy Agency (IEA) World Energy Outlook Special Report 2016: Energy and Air Pollution stressed the imperative of addressing energy poverty in developing countries. The IEA also emphasised that pollutant emissions would, simultaneously, need to be reduced using post-combustion technologies and renewables. The IEA points out that emission-control technologies are already widely available – a fact that would point to the continued use of fossil fuels, such as coal, for power generation.

Internationally traded coal prices have been under pressure for the past few years and could remain so in the immediate term. The global economy is in a period of fundamental change. The living standards of people in countries with emerging economies, particularly those in Asia, are improving and this is increasing demand for energy, commodities and food.