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Viewing cable 06JOHANNESBURG339, THE SOUTH AFRICAN COAL INDUSTRY: PART IV -- AFRICAN COAL

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Reference ID Created Released Classification Origin
06JOHANNESBURG339 2006-09-08 16:54 2011-08-24 01:00 UNCLASSIFIED Consulate Johannesburg
VZCZCXRO5426
RR RUEHDU RUEHMR RUEHRN
DE RUEHJO #0339/01 2511654
ZNR UUUUU ZZH
R 081654Z SEP 06
FM AMCONSUL JOHANNESBURG
TO RUEHC/SECSTATE WASHDC 5285
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCNSAD/SADC COLLECTIVE
RUEHJO/AMCONSUL JOHANNESBURG 1941
UNCLAS SECTION 01 OF 03 JOHANNESBURG 000339 
 
SIPDIS 
 
SIPDIS 
 
STATE PLEASE PASS USAID AND USGS 
USDOC FOR 4510/ITA/MAC/AME/OA/DIEMOND 
 
E.O. 12958: N/A 
TAGS: EMIN ENRG ECON SF
SUBJECT: THE SOUTH AFRICAN COAL INDUSTRY:  PART IV -- AFRICAN COAL 
 
REF: A) JOHANNESBURG 335 B) JOHANNESBURG 337 
 
JOHANNESBU 00000339  001.2 OF 003 
 
 
1. (U) Introduction:  This is the fourth and last of a four-part 
cable dealing with coal and the important role it plays in the 
South African economy.  Part 4 provides information on some of 
the coal-related developments in other African countries. 
Reftel A provides a summary for all four sections.   End 
Introduction. 
 
Coal in Africa 
-------------- 
2. (U) Virtually all of Africa's coal reserves are located in 
the southern part of the continent and are overwhelmingly 
bituminous in rank.  (Note: Reserves are that portion of a 
deposit or resource base that are economically recoverable under 
present economic and technical conditions. End Note.)  South 
Africa holds about 90% of these with proven recoverable reserves 
of 31 billion tons (2005) with identified resources of 120 
billion tons.  Most of the remaining reserves are shared between 
South Africa's neighbors, Botswana, Zimbabwe, Mozambique and 
Swaziland.  In 2005, South Africa produced 245 million tons of 
salable coal.  The second biggest producer was Zimbabwe with 2.8 
million tons (down from 3.7 million tons in 2002).  Third was 
Botswana, with 927,000 tons, followed by Swaziland with 550,000 
tons.  Zambia, Tanzania, Malawi and Mozambique each produced 
less than 100,000 tons.  None of the African bituminous coal 
producers north of the equator (Algeria, Nigeria, Niger, Egypt 
and Morocco) produce more than 200,000 tons per year.  Tanzania 
was the only recorded producer from the East Africa region. 
Isolated coal-bearing sequences in Niger, Nigeria, Morocco and 
Egypt represent locally significant production potential. 
 
Zimbabwe 
-------- 
3. (U) The Hwange Colliery (formerly the Wankie Colliery) is 
Zimbabwe's only coal producer and is the largest coal mining 
complex in Africa outside South Africa.  The coal is used 
primarily for electricity generation and steel making.  The 
colliery has a rated capacity of 3.4 million tons per year, with 
90% from the open pit operation.  In 1980, in-situ resources 
were estimated at 26.6 billion tons, including 11.2 billion tons 
of mineable resources. In 2005, coal production totaled 2.8 
million tons.  Hwange has the capacity to meet all the country's 
energy needs but inadequate investment in maintenance and new 
production facilities has impeded its ability to do so in 
practice. 
 
Botswana 
-------- 
4. (U) Botswana hosts large low-grade and relatively untapped 
thermal-quality coal resources in two coalfields, Morupule and 
Mmamabula, located in the east of the country.  Together, these 
are estimated to contain more than 17 billion tons of coal, 
while unproven estimates for the country range as high as 200 
billion tons.  In 2005, the Morupule Colliery, Botswana's only 
operating coal mine, produced 927,000 tons of coal.  The major 
portion went to feed the 132 MW Morupule power station, which 
supplies about 30% of the country's electricity needs.  The rest 
went to nickel-copper and soda ash plants.  Botswana's imported 
the other 70%, mainly from Eskom.  Kalahari Energy, a Botswana 
company, has obtained encouraging results from its current 
drilling program for coal-bed methane (CBM) on deposits near the 
border with Zimbabwe.  Independent consultants' estimate the 
resource at a huge 196 trillion cubic feet (tcf) of which 40 to 
60 tcf are considered recoverable. 
 
Mozambique 
---------- 
5. (U) Mozambique has extensive coal resources in six identified 
coalfields.  These are reported to host 4.5 billion tons of 
proven reserves (in two fields) and a total of 15.8 billion tons 
of identified resources.  Some 40% of these resources are 
believed to be in the Moatize coalfield, with the remainder 
dispersed in three other significant fields.  Before the civil 
war (1975-1994) the Moatize coalfield produced about 500,000 
tons per year, but output fell to 20,000 tons by the late 
1990's.  In 2005, Mozambique produced an estimated 35,000 tons 
of coal.  In November 2004, the Brazilian company, Companhia 
Vale do Rio Doce (CVRD) in association with American Metals and 
Coal International (AMCI) was awarded a concession (at a cost of 
$122.8 million) to explore and develop the coal deposits in the 
Moatize region.  If successful, they will construct a coal mine 
and power station and the necessary infrastructure for the 
export of coking and thermal coal. 
 
Malawi 
------ 
6. (U) Malawi hosts five identified coalfields, containing 
reserves of 20 million tons and a resource of 750 million tons. 
 
JOHANNESBU 00000339  002.2 OF 003 
 
 
Other fields in the southern part of the country remain 
unexplored.  Malawi has one coal mine, Mchenga Coal Mines, which 
produces about 5,000 tons a month from the Livingstonia 
coalfield.  The company supplies coal to the domestic market and 
exports some 1,000 tons per month to Tanzania for cement 
production. 
 
Swaziland 
--------- 
7. (U) Swaziland has a single operating coal mine, the Maloma 
colliery, which produced 550,000 tons of anthracite coal in 
2005.  The mine is 75%-owned and operated by Xstrata, South 
Africa, and all production is exported to South Africa.  A 
second mine, the Emaswatini bituminous coal mine at Mpaka, was 
closed in 1992 as it was no longer commercially viable. 
Swaziland has proven bituminous coal reserves of about 208 
million tons. 
 
Tanzania 
-------- 
8. (U) Coal occurs in two basins in Southwest Tanzania.  A total 
of about 1.5 billion tons have so far been identified.  The 
country's only coal mine at Kiwira has an average annual output 
of 35,000 tons.  The mine was designed to supply its own small 6 
MW on-site power plant and local consumers.  Due to poor 
maintenance, power production has dropped to between 2 and 2.5 
MW.  The mine has the potential to supply coal for a 200 MW 
station but appears unable to provide security of supply to 
local cement and fertilizer customers. 
 
Zambia 
------ 
9. (U) The only coal-mining operation in Zambia is the 
government-owned Maamba Colliery that produces about 70,000 tons 
of coal annually.  Attempts to privatize the operation proved 
unsuccessful.  The operation consists of two open pits and a 
coal-preparation plant with a production capacity of 800,000 
tons per year of run-of-mine coal but is reported to be in a 
very run-down condition.  The estimated annual demand for local 
coal is 240,000 tons, plus identified export markets in Malawi, 
Tanzania and the Democratic Republic of Congo. 
 
Egypt 
----- 
10. (U) Egypt has one small coal mine, the Maghara underground 
mine in the Sinai Peninsula.  Its designed capacity is 600,000 
tons per year, while annual production is reported to be around 
360,000 tons.  National demand for hard coal is about 1.2 
million tons and is primarily used in the Helwan steel works. 
Maghara production is non-coking and it is blended with imported 
metallurgical coal for steel production. 
 
Nigeria 
------- 
11. (U) Nigeria has a small coal industry that produces about 
60,000 tons per year of sub-bituminous coal from four 
state-owned mines.  Hard coal resources are estimated at 2.5 
billion tons, plus 250 million tons of lignite.  Since the 
discovery of oil, coal production declined from 900,000tpy in 
1959 to virtually nil.  The government is pushing to privatize 
and rejuvenate the industry and has signed its first production 
sharing agreement with Nordic Industries, a consortium of 
Danish, British and local firms, to develop its coal industry. 
 
Niger 
----- 
12. (U) Sociiti Nigerienne de Charbon d'Anour-Araren (SONICHAR) 
operates an opencast coal operation in the western part of the 
Air Massif in north central Niger. Coal quality is low but 
suitable for on-site power generation used by the nearby uranium 
mines.  The mine has reserves estimated at 9.1 million tons and 
produces an estimated 180,000 tons per year to feed a linked 
mine-mouth thermal power station comprising two 18.8 MW units. 
Niger's total coal resource is estimated at 13.7 million tons. 
 
Kenya 
----- 
13. (U) Kenya Electricity Generating Company is exploring coal 
prospects in the Kitui and MWingi Districts. Although still in 
the preliminary stages it is believed that the country has the 
potential to generate 150 MW of coal-fired electricity. 
 
Namibia 
------- 
14. (U) Namibia currently imports 48% of its electricity from 
South Africa (Eskom) and 5% from Zambia, Zimbabwe and other 
short-term energy markets.  Anglo-American is investigating the 
feasibility of mining coal deposits near the town of Aranos. 
 
JOHANNESBU 00000339  003.2 OF 003 
 
 
This represents one of two separate mega-projects being studied 
by Anglo Coal, Anglo American's coal mining subsidiary. 
 
Morocco 
------- 
15. (U) Morocco has no significant coal production and imports 
coal for its coal-fired power plant which supplied about 64% of 
its electricity in 2005.  The 1.4 MW Jorf Lasfar power plant on 
the Atlantic coast satisfies approximately 65% of the country's 
base-load electricity demand and provided one-third of the total 
electricity supply.  Morocco has coal supply agreements 
amounting to 4 million tons per year to feed the Jorf Lasar and 
the government-owned Mohamedia (430 MW) power plants. 
LUOMA-OVERSTREET