Cape Town - South Africa’s coal sales to Europe have surged following an increase in demand for fossil fuel amid sanctions on Russia.
According to Reuters news agency, Johannesburg-based Thungela Resources reported on Monday that its half-year profits were 20-times higher than the year before. It added that as a coal exporter, South Africa's coal sales to Europe have risen eight-fold.
Coal prices have been driven to record highs following the increased gas-to-coal switching due to the Russia-Ukraine conflict, with Thungela reporting headline earnings per share (HEPS) R67.23 rand for the six months to June 30, up from R3.05 rand a year earlier.
Furthermore, Thungela which is part of a consortium that owns Africa’s largest coal export facility, said Europe is currently competing with Asia for South African coal. However, company CEO said South Africa was unable to take full advantage of the situation due to its deteriorating infrastructure.
Meanwhile, the European Union’s ban on coal imports from Russia as part of its sanctions due to the Ukraine conflict came into effect on August 10.
Deutsche Welle News reported that Russia’s coal imports accounted for 70% of the EU’s thermal coal imports in order to generate electricity.
In an interview with DW, Brian Ricketts from the European Association for Coal and Lignite (Eurocoal) said they were looking at alternatives power sources but in the meantime, expected the EU to start importing more coal than before.
“We believe that this will happen because up to 120 terawatt hours of electricity production from gas are to be replaced by hard coal and lignite.
“That would save around 22 billion cubic meters of gas a year, far more than any other individual measure,” said Ricketts.
IOL