Given the depressed conditions, which if pundits’ views are to be believed, may not improve in the near to medium term, no sane coal miner would hesitate to dispose of non-performing assets to the lowest bidder.
For South African coal assets, salvation may come in the form of high demand for energy in Indian economy. In October, India’s coal secretary, Anil Swarup, during the Reuters Global Commodities Summit, revealed that state-run Coal India was involved in talks to buy South African coal mines to feed its expanding steel industry.
Swarup said that India, which wants to triple its steel capacity to 300 million tonnes by 2025, did not have enough reserves of coking or steelmaking coal, prompting Coal India to look at assets abroad.
“We imported around 80-90 million tonnes of coking coal last (fiscal) year and if that is the amount that can come through a mine owned by Coal India, it would consider it,” he elaborated, hinting that a purchase was a high possibility.
African Mining Brief Online will be keeping track of developments as they unfold in 2016.