Thungela Resources’ recently appointed CEO Moses Madondo, who was recruited from the diamond-mining sector, was confident about the future of the mining sector in general, and coal mining in particular. He made this clear during a “fireside chat” session at the twenty-first annual Southern African Coal Conference, being held in Cape Town, on Thursday.

“There is a need for coal,” he affirmed. “There is also a need for investment into coal!” The demand and need for coal would “continue for the longest time”. The global political situation meant that the security of energy supply was “going to be critical”.

“Clearly, Africa is going to grow,” he stressed. “We do see that growth. We’re excited about it.”

Africa would need a lot of energy to grow, and it would have to be affordable energy. Asia had proven that affordable energy was necessary for growth, and Africa would be the same. Affordable energy meant coal. “There will be coal-fired power stations being built.”

It would be possible to increase the amount of coal mined in South Africa. That would need investment, but seaborne demand for the country’s coal would stay strong. For example, there was the fast-growing Indian market, which he had just visited – “they’re bullish about coal,” he reported. “If there’s demand, supply must meet that demand.” 

Mining more generally has had an image problem, he noted. But a lesson from the diamond sector was that “the narrative can change!”.

“Mining is necessary for the future of the world,” he pointed out. “You cannot do without mining.” But it had to be responsible mining. Environmental, social and governance adherence remained important.

The global environment for mining was currently challenging, but mining went through cycles. “Geopolitics” (as businessmen erroneously called power politics) was currently one of the challenges. “Geopolitics [however] have always been with us,” he observed. “They will always be with us.”

As for Thungela, “I’m coming to a business that is solid,” he said. “It’s what we can do with this business going forward is what excited me.” The group had a history of supporting industrial development in South Africa and of exporting, and it had had a positive impact.

Thungela was set to grow and internationalising its footprint (it had offices in Australia and Dubai as well as South Africa) gave it a platform for growth. Although seen as a coal company, its ambition was to be a resources company. The group was going to review its strategy this year, and expanding from a coal to a wider resources enterprise was “almost a natural extension”.

The company already had a coal-bed methane gas project in Limpopo province. “We are excited about our Lephalale project for gas,” reported Madondo. “We are in the process of drilling, trialling, for gas. This is an exciting opportunity.”