Africa-Press – Eswatini. While the country’s authorities had given prospective miners prospecting rights for coal in a bid to boost the mining industry, it appears that these efforts are bound to be hamstrung by the continuous weakening of coal prices.
The World Bank expects the price of coal to significantly weaken further in 2024/25, dampening the prospects of reigniting an industry that is envisioned to boost the kingdom’s economy and create employment opportunities for hundreds of emaSwati. The Washington-based lender in its latest Commodity Markets Outlook said prices of coal fell by about 8.0 per cent in the first quarter of 2024, due to substitution away from coal in the power sector.
The World Bank observed that demand growth slowed due to soft economic activity, the increased penetration of renewable electricity, and lower gas prices. However, global coal production is estimated to have risen by about 150 t in 2023. Output rose by about 100 million metric tonnes in India, but by only about 50 million metric tonnes in China, partly owing to increased safety measures in domestic mines. According to the bank, coal consumption is expected to decrease markedly in the European Union and the United States, continuing recent trends, and to have peaked last year in China, with the prospective rise in renewable generation projected to exceed growth in electricity demand.
Coal trade is estimated to have peaked in 2023 and is projected to decrease faster than consumption and production. Declining demand in the European Union is likely to particularly affect coal producers that raised exports following the Russian invasion of Ukraine, including Indonesia, Colombia, and South Africa.
“Prices might be lower than projected if this pattern continues. Lower prices than projected could result from weaker-than-anticipated economic growth, especially in China and India,” reads the World Bank Outlook report. With these downside risks, Eswatini’s desired job projections could not be realised notwithstanding that the country hosts large reserves of coal, which are low-volatile bituminous coals or anthracite. Unlocking the mining sector in the Kingdom of Eswatini as statistics from the Central Statistics Office Annual GDP Report states that the mining and quarrying industry is the least contributor to the country’s GDP as it contributes only 0.2 per cent.
To revive the industry, in July 2022, His Majesty King Mswati III granted mineral rights to Mwelase Mining Eswatini (Pty) Ltd for Iron Ore Resources at the Ngwenya Iron Ore site. An environmental impact assessment study detailed that the project requires a workforce of about 460 employees. In October 2021, the King granted Lurco Coal Eswatini a prospecting for coal resources at Mpaka Coal Mine in the Lubombo region which had been mothballed in 1992 after the previous owner exited the Eswatini market.
According to reports various studies have been undertaken to re-establish mining, but to date, no development of the project has been recorded.
Other companies which are conducting studies to establish mining in the country are Magomba Coal Mine, Eswatini Antracite and L.C.E Investments trading as Mpaka Colliery. The Minister of Commerce announced that a mining license had been issued for the Mpaka Coal Mine in March 2022. This may indicate that there are plans to go ahead with the Mpaka Power. The anthracite mine at Maloma commenced with production in 1993 with the material exported mainly to South Africa.
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