Abstract
Junior coal mining companies in South Africa face a significant number of hurdles in coal processing and production which has resulted in the companies having difficulties in raising funds to stay in business. The objective of this study was to investigate the challenges faced by junior coal mining companies during prospecting, exploration, extraction, beneficiation, distribution and legislation as they undertake the processing of their products. The researcher conducted a survey to gather data from 120 companies to accomplish this objective. Eighty-five companies responded to the questionnaire and follow-ups were conducted upon request, in order to clarify any question that the respondent did not understand.
The research used a quantitative research method premised on the use of a survey research design to unveil the operational challenges faced by junior coal mining companies in Mpumalanga. The questions were based on company information, company documentation and assistance from other entities, sourcing of finance, contracting, production activities and distribution.
The literature review showed that there are three large markets for coal in South Africa, comprising Eskom, domestic sales and export market; however, less than eight companies are the largest coal producers. Recently through the assistance of Eskom and Black Economic Empowerment (BEE), junior coal mining companies now account for 30% of the coal production in the country. The results identified that most of the junior coal mining companies in South Africa had been in production for less than 15 years, and they had the necessary documents to run their operations legally. In order to address the challenges experienced during prospecting, 95% of junior coal mining companies engaged consultants to acquire better quality reserves. During the exploration stage, most junior coal mining companies ran out of funds due to the costs of geological mapping, trenching and drilling for samples; 81% of funding is financed through banks and private investments. During the extraction and beneficiation stage, junior coal mining companies lacked the expertise, as the study revealed that 67% of managers did not hold a qualification in mining, which reduces the marketability of the company. Furthermore, the lack of equipment revealed that about 47% of junior coal mining companies used contractors. During the distribution process, the study also revealed that more than 70% of junior coal mining companies used road transportation. Based on the results of the study, it is recommended that the Department of Mineral Resources should consider developing guidelines and dedicated mentors to assist with making the process more understandable and efficient. All managers should be encouraged to have a short course mining certificate so that they can understand the basics of mining. The Department of Transport should fix all problems with roads, rail, conveyor belts and banks should assist junior coal mining companies with loans. It can be concluded that if junior coal mining companies are assisted with the above recommendations, they would be able to process their products effectively and efficiently.