Coal now and in the future

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1 Coal now and in the future Optimisation of Industrial Boilers VI: Co-Firing and Biomass Fossil Fuel Foundation of Africa 19 September 2013 GJ de Korte

2 Overview Coal production and use in South Africa Coal quality requirements for industrial use Coal beneficiation

3 Approximate production and coal use in SA User / application Million tons per annum % of total Eskom Sasol Other local 19 8 Export Total Eberhard Jan 2011

4 Value of coal in the mining sector Mineral Contribution to total mineral sales during Dec 2012 Feb 2013 Dec 2012 Feb 2013 Mar 2013 May 2013 % R Millions R Millions Gold Iron ore Chromium ore Copper Manganese ore PGMs Nickel Other metallic minerals Coal Building materials Other non-metallic minerals Total Table D Seasonally adjusted mineral sales at current prices for the latest three months by mineral group and mineral : Statistical release P2041 Mining: Production and sales (Preliminary) June Statistics South Africa

5 Main industrial uses of coal in SA Combustion (generation of electricity, steam, drying, smelting, cooking, heating, other) Gasification and liquefaction (production of synthesis gas, chemicals) Carbonization (production of coke and char) 93% of South Africa s electricity is generated in coal fired thermal power stations

6 Mining About 51% of coal mined from opencast operations Several mines re-mining pillars from previous U/G operations Coal Resources and Reserves Study of South Africa South Africa still has approximately 60-billion tons of recoverable coal reserves left

7 Opencast mining

8 SA Coal Roadmap Despite coal being a major contributor to SA s economy, SA has no explicit coal policy The South African Coal Roadmap was developed to explore the short, medium and long-term activities and interventions needed to support the coal industry in South Africa to maximise its contribution to South Africa in the face of an uncertain future

9 SA Coal Roadmap (contd.) Coal Roadmap - developed through a collaboration of members of the coal value chain including the national Departments of Energy and Mineral Resources Electricity security Exports Competitiveness Employment Environment

10 Main drivers in future Domestic electricity generation Export especially to China and India

11 Additional factors Eventual depletion of coal reserves in central basin predictions ~ 2040 New coalfields to be developed Waterberg, Limpopo, neighboring countries Balance exports with inland demand and security of coal supply in longer term (low grade coal to India) Declare coal a strategic mineral?

12 Main demand will be from power generation Medupi + Kusile will require additional 30 million t/a Sasol Mafuta? Future coal requirements Export growth dependent on transport infrastructure RBCT capacity 91 million t/a rail capacity < 91 Influence of new technologies FBC of discards, cofiring of bio-mass, UCG

13 Constraints Environmental concerns Carbon emissions / tax Climate change Viable alternatives to coal nuclear, solar, wind? Politics

14 Run-of-Mine coal

15 Raw coal Usually not suited for direct use Un-sized and of variable quality Contains impurities shale and stone Industrial processes require specific coal properties Raw coal requires processing to improve quality

16 Coal properties required for PF combustion CV: > 20 MJ/kg & consistent quality Volatile matter: > 20% AFT: >1300 o C Nitrogen: <1% Sulphur: 0,7 to 2,0% Total moisture: <11,0% Size consist: Typically 50 mm & max 30% -3 mm

17 Coal properties required for stokers Size consist: Grains, peas, mixed smalls CV: > 23,5 MJ/kg & consistent quality Volatile matter: > 20% (ad) AFT: >1300 o C Caking properties: Low Sulphur: < 2,0% Ash content: 8 -> 30%

18 Coal properties for metallurgical use Vitrinite content: > 50% RoV: 0,6 0,8% Swelling index: >2,5 Fixed carbon content: > 55% Sulphur: < 1,5% Phosphorus content: < 0,01% Ash content: < 15% Volatile matter content: 30 40% (dmmf) Size consist: Dependent on process

19 Coal preparation - advantages Improves heat value of coal, lowers transport cost and lowers sulphur content of coal Provides consistent size and quality coal Improves combustion properties of coal Allows low grade reserves to be utilized

20 Beneficiation Plant

21 Coal preparation - disadvantages Cost of building and operating coal processing plants Discard and slurry Uses water Increases moisture content of coal

22 Coal discard dump

23 Slurry pond

24 Coal supply to Eskom Past each power station supplied by conveyor belt from captive colliery At present only 3 stations supplied this way Others supplied by conveyor + road and rail Approximately 25% of Eskom requirement supplied by small coal contractors by road transport

25 Majuba Power Station

26 Coal trucks at colliery

27 Coal supply to Eskom Eskom coal in past mainly raw, crushed coal Current supply mixture of raw coal, washed coal and middling coal Several small new mining operations on the fringes of the coalfield lower quality coal Coal requires processing to bring up to Eskom spec Many previously export-only plants now re-wash discards to produce middling coal for Eskom

28 Coal processing technologies Dense medium processing still dominant Lower cost options researched 3-Product dense medium cyclone from China can produce export + Eskom coal with single medium circuit

29 3 Product cyclone

30 Water Traditional coal processing requires ~ 150 liters of water for every ton of coal processed By closing water circuits, this can be reduced to ~50 Some plants have installed filter presses This also eliminates slurry ponds

31 Filter press

32 Filter cake from press

33 Dry processing Completely dry processing of coal two technologies evaluated and implemented to date FGX (China) X-Ray sorting (Germany) Dry processing is less expensive than dense medium but also less efficient Dry processing technologies applicable in specific cases

34 FGX plant

35 X-Ray sorter

36 Conclusions Coal will remain primary energy source in SA for some time Our coal reserves need to be optimally utilized and managed Quality of the raw coal mined will continue to decline New coal mines will have to be developed Beneficiation will play an ever-increasing role

37 Thank you