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South Africa establishes state mining company

World Coal,

A state mining company focusing on coal and uranium will be up and running in South Africa by the end of February, according Sandile Nogxina, director general of the mining department. However, most of its work will be contracted out to private companies.

Talking to Reuters at a mining conference in Cape Town, Nogxina confirmed the establishment of a state mining company but said that it would “compete like any other company." The firm will operate a coal mine in the northeast province of Mpumalanga and eventually hold stakes in other companies, he added.

Nogxina went on to say that the South African Government was also exploring the possibility of declaring coal a “strategic mineral” in order to ensure enough coal is supplied to power the country’s growing economy. Coal provides 95% of South Africa’s energy demand, but Eskom, the state utility, recently accused mining companies of being more interested in developing exports than ensuring domestic demand.

"We may in the fullness of time consider it a strategic mineral because it drives the economy in South Africa," Nogxina said. "We are working on a policy on the declaration of strategic minerals."

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