Exxaro Resources, a coal miner in South Africa, said on Thursday that it has received “many” approaches from European nations seeking to sign supply contracts after the European Union suggested sanctions on Russian coal.
According to Exxaro, European countries are under “great pressure” to diversify their coal supply as a result of EU sanctions against Russia imposed after the latter invaded Ukraine.
According to two EU sources, European Union envoys are expected to accept an embargo on Russian coal that would take effect in mid-August, a month later than originally anticipated.
Exxaro stated that it possesses the correct grade of coal for the European market, but that current output has already been allotted, and that South Africa’s ailing rail network will prevent miners from exporting more to satisfy the growing demand.
“South African coal producers have the capacity to produce additional coal,” Exxaro stated, “but major effort will need to be done to enhance logistics in order to ramp up coal supply for export.”
Cable theft and vandalism have reduced the capacity of state-owned rail business Transnet to transport mineral exports, resulting in a 14 percent drop in throughput in the year to March 2021 compared to the previous year.
Following the deployment of 40 extra locomotives by Transnet in March 2022, South Africa’s coal exporters predict a 10 million tonne boost in Transnet capacity this year.
