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South Africa's Coal Exports to India as a Percentage of Total Coal Exports

By John MaynardCommoditiesDec 07, 2018 12:40
za.investing.com/analysis/south-africas-coal-exports-to-india-as-a-percentage-of-total-coal-exports-200197934
South Africa's Coal Exports to India as a Percentage of Total Coal Exports
By John Maynard   |  Dec 07, 2018 12:40
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We take a look at South Africa's customs data and focus on South Africa's coal exports and in particular, it's coal exports to India, which is currently the main destination of South Africa's coal exports to the world. Coal regularly makes it to the top 3 in terms of what South Africa exports. Other big exports are Gold, Platinum and vehicles.

South Africa's coal exports to BRICS partner India

So coal is a big export for South Africa, often fighting it out with Gold and platinum for the top commodity export in South Africa. But surprisingly our coal does not all head to China as many would think. India is the biggest importer of South Africa's coal. The line chart below shows the percentage in terms of value, of South Africa's total coal exports that are destined for India, based on the customs data published by the South African Revenue Service (SARS).

South Africa's Coal Exports to India
South Africa's Coal Exports to India

As can be seen from the line graph, the contribution India makes to South Africa's total coal exports has been increasing over time, with it hovering around 20% of South Africa's total coal exports in early 2010 to it currently sitting at 46.35% of South Africa's total coal exports heading to India. So almost half the coal being exported out of South Africa head to India. And the coal we are exporting is not small change. In September 2018 South Africa exported R3.46 billion worth of coal to India. South Africa's total coal exports for September 2018 amounted to R8.2 billion.

So how ESKOM runs out of coal is beyond reason, as South Africa exports over R8 billion worth of the stuff to the rest of the world. From January 2018 to September 2018, South Africa exported R56 billion worth of coal, of which R26.4 billion went to India. During the same period, South Africa exported 56 million tonnes worth of coal, with 27.5 million tonnes going to India. This gives an average price of R958 a tonne of coal exported, or 95c a kilogram. Makes one wonder how much money the guys are making selling charcoal for braai's. As those 4kg packets definitely don't cost around R4 a packet.

With India's economy steaming along at a growth rate of over 7% we suspect the demand for coal in the world's 6th biggest economy (with India now bigger than France in terms of economic size) will continue to grow and South African coal firms will continue to export "black gold" to India and other fast-growing economies that need commodities. Sadly for South Africa while this continues locally ESKOM is struggling to keep the lights on due to lack of coal reserves and supplies. Poor quality coal supplied to ESKOM lead to a rock within the coal exploding in one of the furnaces of a power station.

We predict, solar and alternative energy will boom in South Africa as businesses and citizens move off the ESKOM grid and become more self sufficient and less dependent on ESKOM.

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South Africa's Coal Exports to India as a Percentage of Total Coal Exports
 

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South Africa's Coal Exports to India as a Percentage of Total Coal Exports

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