South Africa currently has 16 project proposals for mostly thermal coal projects in the pipeline with an aggregate capacity of 44mn t/yr, according to the IEA.
Globally, new or expanded coal mines aimed at the export market with a total capacity of 430mn t/yr are planned, the IEA says in its Coal 2024 Analysis and forecast to 2027 report.
Last year coal consumption in Africa increased by 6mn t to 191mn t, the IEA estimates, driven mainly by South Africa's higher coal consumption owing to an improved performance by state-owned Eskom's electricity plants.
In the near term, the IEA forecasts modest growth in Africa's total coal demand to 203mn t/yr by 2027.
South Africa increased its coal consumption to 165mn t last year on improved economic activity and less load shedding. The country is by far the biggest coal consumer in Africa, accounting for 86pc of the continent's coal consumption in 2023.
Strong electricity demand growth is expected to create room for an additional 14 TWh of coal-fired generation in South Africa over the next three years, the IEA predicts.
Three coal-fired power plants of 4.5GW capacity that were due to shut by 2027 will run until at least 2030. Hence the IEA projects that South Africa's coal consumption for power generation will rise to 124mn t by 2027.
"The future of coal demand in South Africa will be shaped by policy makers' decisions regarding the coal-fired power fleet, either to invest in their maintenance to keep them running for longer or to phase them out," the IEA says.
Coal production in South Africa grew marginally over the past two years to 234mn t in 2024, the IEA estimates.
The main challenges to increasing production have been an unstable electricity grid and frequent disruptions to coal transport as state-owned Transnet has struggled with collisions, equipment failures, cable theft, derailments, power outages and increased costs.
Last year, South Africa's Canyon Coal started shipments from its Gugulethu mine that is set to produce 2.4mn t/yr, half of which will be NAR 5,500 kcal/kg fob RB thermal coal.
After years of being in administration, the Optimum coal mine was added to the project pipeline after new owner Liberty Coal settled outstanding legal issues related to the mine. Liberty plans to increase Optimum's capacity to 11mn t/yr of mid-CV thermal coal, but the mine first needs significant reconstruction.
Until 2027, the IEA expects coal production in South Africa and most other African countries to remain flat, apart from Ethiopia where a new coal mine will slightly boost output, the IEA said.
But growing steel production in Mozambique and Zimbabwe is set to propel coal production.
In Mozambique, India's state-controlled Steel Authority of India (Sail) will invest up to $200mn over the next four years to double the capacity of its Benga coking coal mine to 4.5mn t/yr. Most of the mine's output is intended for Sail's internal use in India.
In Zimbabwe, Chinese firm Tsingshan Holding's Dinson Iron and Steel (Disco) unit started production last year, with initial capacity of 600,000 t/yr to be expanded to 5mn t/yr once the plant is complete.
In addition, Mozambique, Zimbabwe and Botswana plan a major infrastructure project, which includes a new deepwater port at Techobanine, south of Maputo, that will cost up to $1.5bn. Botswana plans to revive a long-standing project to create a 1,700km rail link through Zimbabwe to Maputo, enabling the landlocked country to export its coal reserves estimated at over 200bn t.
South African infrastructure operator Grindrod will take full ownership of the Matola Coal Terminal in Mozambique by spending $77mn to acquire Vitol's 35pc stake. Grindrod then intends to expand the terminal's capacity beyond its current 7mn t/yr.
Thai Mocambique Logistica plans to construct a coal port at Macuse in Mozambique and build a railway line to connect the port with coal mines in Tete province.
Neighbouring Malawi also aims to import coal from Tete via a rehabilitated railway from Balaka to its capital Lilongwe. "The country is seen as a favourable option for coal exports compared to South Africa, whose ports are expected to reach capacity limits," the IEA says.
